22(M) soon to be 23 yo in the AirForce on a 4 year contract. E-3 first term. Currently half way finished. This is my situation.
Emergency Fund(AMEX HYSA): $5,000
Savings(AMEX HYSA): $1,800
Checkings: $700
TOTAL: $7,500
Personal investments: $5480
Personal ROTH IRA: $213
TOTAL: $5693
Debt:
I have a motorcycle that I’ve had since before the military and I owe $3800 on it atm. The interest rate is 6% as of now. I’m doing 200$ monthly payments. I don’t have any other mode of transportation because I don’t want to have another loan. Also not keen on having a car unless I pay outright for it.
I have an Amex card with about $230 on it right now. I pay it off monthly. Before that I had dug myself out of a $2,300 hole that took like 4 months.
Bills:
Bike payment: $200
Insurance: $70
Subscriptions : $120
WiFi: $60
Phone: $145
I’m currently deployed and I’m making more than my normal stateside checks. It’s only about 250$ extra per check(1st and 15th)but I used that to snowball my debt and get my EF to 1k. I then decided that I wanted to get up to 3k to cover 3 months worth of bills in the event of gov shut downs(that’s been a theme lately). I met that goal rather quick and just recently got up to 5k which I felt was a good number for me to cover all my expenses at the moment for about 6 months being frugal.
I’m trying to secure a runway fund for when I get out because I’d like to travel for months at a time or move out the country. I believe I can get to up to 25-30k saved up by the time of separation. I’m now throwing 1,000$ a month into my runway fund and 250$ a month into regular savings. Is there anyway that I can maximize anything else. Obviously I tried to take advantage of the tax free pay out here but I haven’t had time to really explore the other opportunities and benefits the airforce has to offer. I was in training for about 6 months and then got deployed 9 months into being at my first duty station. Coming back id like to really hit the ground running and keep the momentum. If any vets or current members have any advice on how to stack chips in the military that would be appreciated. Also general advice would also be appreciated just as much. Thank you.
Young military member looking for advice.
byu/Dbomb5900 inpersonalfinance
Posted by Dbomb5900
6 Comments
You’re doing great. You already know the strategy and the tactics, now you just need to execute. Hold the course, and you should come out peachy.
Pay more than the minimum on the bike and get it paid off ASAP.
Then take whatever you have left over and start following the flowchart in the wiki.
Of course everyone wants to travel for months at a time, but that’s not realistic. 25-30k is what you need to separate from the military and find a job before you run out of money, not spend it all. Sure, a week long trip, but not anything significant.
Don’t screw yourself over by not using the military. Finish your contract, go to school on the GI Bill and get a good, stable career.
Follow the prime directive linked below or the “start here” on r/militaryfinance.
r/MilitaryFinance has a lot of good tips.
I don’t see any mention of contributing to a TSP. You at least want to get a match. I think there is also extra tax-free you can contribute to the TSP when you are deployed, but the military finance sub will know more about that.
Since the HYSA don’t pay more than the interest in the bike loan, you should prioritize that over more savings. You should have that loan knocked out in no time.
You’re doing fine, but the biggest glaring gap is retirement investing. Your Roth is basically nothing, and you didn’t mention TSP. Are you at least contributing 5% of your pay to get the full match?
I know retirement seems like a lifetime away, but it comes quicker than you think. Due to time, the most valuable dollar you invest is the first one, so it’s time to get started now.
As a side note, hopefully your Amex card is a platinum. Great benefits, hefty annual fee waived for active duty military.
Source: I’m retired military.