For the ordinary military person, NOT FAILING in his financial second innings is step one. Most military people are not psychologically, physically or financially ready for a post defense services life. They have been protected and have led a very insulated life. They are trustworthy, lead an uncomplicated life, they get a salary which cannot be negotiated, and lead a simple life where all the basic needs are reasonably well provided.

So when they come to the civilian’s society, they need some kind of a basic preparation. These steps will NOT make you rich, but will save you from financial failure. To get rich you have to do much more, here is just a basic attempt to keep you safe.

Since you have been a defense person, let us look how you prepare for an event (war or a peace time activity)…and lets see what you will do:

Make a Battle Plan (ok let us call it a financial plan): this does not require a planner, you can do it yourself. This is the first document necessary for you to ‘TAKE CHARGE’ OF YOUR personal finances.

Every mission/ goal must have its objectives and so also true for a financial plan.

So, what are your financial objectives? Here are some basic goals you might want to accomplish:

• Build an emergency fund.
• Get out of debt.
• Buy a house.
• Start saving for retirement.
• Children’s requirement.

To achieve these goals, you need to make a joint plan with your spouse. One of the fastest ways to fail a mission is to have your teammate follow an entirely different objective. Once you know and agree on your current objectives, look at your resources –- a soldier might call these their “sensitive items.” These are:

• Income.
• Expenses.
• Second (Potential) additional income.
• Smart spending to save money.
• Invest the saved money, and grow it

Thinking through these factors with your spouse is a nice way to avoid a financial collapse –- it starts you off on a better path.

2. Understand the BFSI language: One of the biggest mistake you can do is to think that your bank RM or IFA is here to service you. They have their sales targets. So understand their language, know why they want you to buy a particular product, and then understand the product. If you do not understand kill your ego and keep asking questions. Once you understand the product, buy it.

3. Buying things you do not need: It’s a mistake many defence people make once they earn some money. Buying things that they do not need. The mistake is buying things that you don’t really need.

Did anyone say, “new car?” Vehicles are probably one of the most tempting expenses –- and one of the most damaging.

Many defense people soldiers don’t realize how easily they would accumulate hundreds of thousands of Rupees by the time they are ready for retirement -– just by contributing  Rs. 2000 a month into an ELSS. Imagine the smile on your face when you reach retirement age!

4. Seek Professional advice: Would you hire a plumber to fix your car? Would you hire a carpenter for your dental problem?

You need to hire the right person for the job. And the same is true when you’re looking for financial advice. Military personnel and their families should seek financial advice from financial professionals.

There are a number of financial credentials out there. However, no degree is so great that you do not need to do due diligence. You could hire  a CFP, or even Chartered accountant. You could also hire someone a little less educated, like a financial coach — there are some good ones. Don’t take the advice of someone who hardly knows anything about personal finance. People who love you may have good intentions but may lack the competence – caveat! Some people who have handled their own money give advice in general. These people talk about asset allocation, equity markets, market timing, fund selection, writing a will…

You get the idea? These people bug me. To avoid a financial disaster, avoid these people and their advice – which can lead to thousands of rupees in losses!!