Author Topic: Case Study - 1st year out of the military, learned a lot the hard way.  (Read 1848 times)

wirednuke83

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Hi all,

Life Situation:

I was in the military, and originally my retirement plans consisted of staying in for 20 years and reaping the benefits of the pension. For various reasons, that journey ended at my 13 year point, and alas I do not have access to said pension. I did end up getting a disability rating, which supplies a small stipend of income every month.

So here I was at 33 with no 401k or retirement fund to speak of. I did see some of the writing on the wall, and my wife and I managed to pay off all our consumer debt and save a little money on the way out the door.

We have made some mistakes along the way, and my wife is not yet 100% onboard with the lifestyle changes, but she's making progress! She really doesn't want to get rid of the nicer cars.

1 year later:

Me - 34
Wife - 33
2 Kids, 7 and 4
Married filing Jointly
Great Lakes major metropolitan suburban area

Income:
Biweekly: 3175,  - 21% raise coming after training is complete (any day now)
Monthly: 1039 dollars from VA disability (Tax Free)
Annual: 20% Bonus, Usually about 16,000 before taxes/401k

Deductions:
401k: 8%, 254$ a paycheck - Will raise this much higher after I get my raise, and 15% from bonuses.
HSA: 29$ a paycheck (750$ enough to cover family deductible of 500 )
Medical/Dental/Life Insurance Etc: 161$ a paycheck

Total Take Home:  2200/2 weeks, + 1039/monthly Approx: 5805/mo

Expenses: We use an envelope (Good Budget app) system, these are budgeted numbers. If we have extra we sweep to savings/principal payments

Needs:

$1218.53 Morgage P&I
$355.32 Tax & Ins & HOA (No PMI, VA Loan)
$700 Groceries
$440 Utilities (Gas, electric, internet, water) Water is high right now from grass watering
$1040 Transportation (Gas, insurance, payments) Here comes some face punches
$120 Tutoring for special needs daughter
$300 Clothes/Shoes/Kid Stuff for school/birthdays etc
$80 Phone

Wants:
$50 Entertainment (Computer game, netflix, hulu, prime etc)
$300 Family Fun (Date Nights, family activities)
$110 Xmas Fund
$1000 Principal payments on auto/house.

Total: $5713

Assets:
Primary Residence (3 br/2.5 bath, 1870 sq): 278,000
2018 Chevy Malibu Hybrid: 25,000
2017 Chevy Equinox: Lease is up 12/18

401k: $16,830.05 (Just started this year, have 8% match)
Roth IRA: $5,642.07 (Just started last month, maxed for year)
529: $4,006 (This is the kids B-day money and gifts from family)
Brokerage: $1,006
Emergency: $15,254 (Discover 1.75% HYS)
Cash on Hand: $17,500

Total: $374,072.69

Liabilities:

Primary Residence: $269,000 at 3.25% (23 years to go at our current rate)
Car Loan: 26,500 at 0.9% (72 mo loan, but about 26 months at my current rate)

Total: $295,500

Net worth: 78,572.69


Questions:

1) I'm torn on the car situation. I know my car note is high, but I have been able to pay more than 1000$/mo on it. The interest rate is low, and I would rather have the cash invested/on hand. Selling it is always an option as well, but I would be losing money obviously. I drive 25,000 miles a year (Hence the huge transportation number), I do spend a lot of time in the car. Should I unload it and get something cheaper?

2) If I don't pay the car off, what should I do with the 17k I have on hand? I'm thinking of the vanguard index funds, the only thing we really wanted to buy was a patio for the back yard.(right now its all grass/dirt)

Lastly, I know we have a long way to go, it would be good to hear from people that have been in my shoes, and made it to Financial Independence.

Other than that, thanks for your time... bring on the brutal honesty!
« Last Edit: July 12, 2018, 12:18:07 PM by wirednuke83 »

lisa_mustache

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I think the "Investment Order" sticky in the Investor Alley section could help a lot.  I'm usually just a Case Study lurker, but I have found the order to be *super* helpful and prescriptive, which takes the guessing and emotion out of decisions that should really just be math! :)

https://forum.mrmoneymustache.com/investor-alley/investment-order/

WHAT           
0. Establish an emergency fund to your satisfaction   You have $15k, so this is done if you feel good with 3 months saved         
1. Contribute to your 401k up to any company match    I feel like you're doing at least 8% now to have the balance you have? 
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.  You don't have any of these, hooray!  On to the next!
3. Max HSA       You have room to add here.  HSA savings are super awesome - they are tax-free to save, tax-free to use, and grow tax-free.  To really benefit from this, you save it up year after year, to be used later (like in early retirement).  That means budgeting for actual medical/dental expenses with non-HSA money.     
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level        You've got this.  I'm not super good at the IRAs, but I think you may also be able to fund one for your wife.  Someone more knowledgeable can help here.      
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5)    I think you're on this step, after you up your HSA contributions.       
6. Fund a mega backdoor Roth if applicable.         
7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.    Again, you don't have any of these.  It feels counterintuitive, but with such a low car loan (assuming you're keeping it), you shouldn't be tossing extra money at your loan every month.  Overpaying your car only gives you a 0.9% return on that money, where it could be better spent maxing your HSA, maxing your 401(k), or funding your Vanguard account (VTSAX yielded 11.8% over the past 12 months).  Sure, it feels good mentally to not have outstanding debts, but if the interest rates are that low, your money can work much harder elsewhere.       
8. Invest in a taxable account and/or fund a 529 with any extra.  I'd put your extra cash into Vanguard, and then use leftover money from the investment order (and any facepunches/tips on your spending) to watch your money pile grow every month!

I'll let other people comment on your spending, but I think you have some good opportunity to adjust where your money is currently going.  Good luck!

wirednuke83

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Thanks for the quick reply!

In response to the above comments by number:

0. I am comfortable with 3 months because I am in the energy industry, I feel pretty secure because I have a niche skill set and electricity will always be in demand!
1. I'm contributing up to the 8% match my employer is providing until I get my raise after training is done.
3. My healthcare has been provided my whole adult life via the military. We are still trying to figure out what our healthcare expenses are. The 750$ I added this year was not enough though!
7. I still have some soul searching to do on this!

Thanks for your advice!

nkt0

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Re: Health insurance/health care. As a veteran don't you have access to the VA? Also with a $500 deductible, can you even use an HSA? My understanding was that those are only available to high deductible plansÖ

diapasoun

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7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.    Again, you don't have any of these.  It feels counterintuitive, but with such a low car loan (assuming you're keeping it), you shouldn't be tossing extra money at your loan every month.  Overpaying your car only gives you a 0.9% return on that money, where it could be better spent maxing your HSA, maxing your 401(k), or funding your Vanguard account (VTSAX yielded 11.8% over the past 12 months).  Sure, it feels good mentally to not have outstanding debts, but if the interest rates are that low, your money can work much harder elsewhere.       

Will come back later when I have more time to go into spending details, but one thing I want to note: Paying off a car early can be very, very worth it if it allows you to change your insurance. Although the guaranteed return on the loan may be relatively small, you can often halve your insurance -- or maybe even more -- if you drop from the type of full comprehensive insurance typically required by banks to liability + self insurance for repairs/replacement. I did this for my much older car just recently, and it's going to save me more than $1500 in insurance over the next two and a half years. That's much more than I would likely have made investing with that money.

Since your car is very new and shiny and expensive, and you don't have a big net worth or cash reserves, self insurance for replacement may not be ideal for you (unless you're willing to significantly downsize on your next vehicle). It worked for me because I could buy a comparable replacement outright with cash -- it would suck, but I could do it. It's an option worth looking into, however.

lisa_mustache

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7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.    Again, you don't have any of these.  It feels counterintuitive, but with such a low car loan (assuming you're keeping it), you shouldn't be tossing extra money at your loan every month.  Overpaying your car only gives you a 0.9% return on that money, where it could be better spent maxing your HSA, maxing your 401(k), or funding your Vanguard account (VTSAX yielded 11.8% over the past 12 months).  Sure, it feels good mentally to not have outstanding debts, but if the interest rates are that low, your money can work much harder elsewhere.       

Will come back later when I have more time to go into spending details, but one thing I want to note: Paying off a car early can be very, very worth it if it allows you to change your insurance. Although the guaranteed return on the loan may be relatively small, you can often halve your insurance -- or maybe even more -- if you drop from the type of full comprehensive insurance typically required by banks to liability + self insurance for repairs/replacement. I did this for my much older car just recently, and it's going to save me more than $1500 in insurance over the next two and a half years. That's much more than I would likely have made investing with that money.

Since your car is very new and shiny and expensive, and you don't have a big net worth or cash reserves, self insurance for replacement may not be ideal for you (unless you're willing to significantly downsize on your next vehicle). It worked for me because I could buy a comparable replacement outright with cash -- it would suck, but I could do it. It's an option worth looking into, however.

Ah, I hadn't thought about insurance cost differences.  I'm not sure reducing car insurance would be a large enough change to offset tax advantages on the overpayment money in other places (HSA/401k), or the 10% difference if that money's invested, but definitely something to add to the equation!  (Also, this is why I'm typically just a lurker... :P) 

wirednuke83

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Re: Health insurance/health care. As a veteran don't you have access to the VA? Also with a $500 deductible, can you even use an HSA? My understanding was that those are only available to high deductible plansÖ

I have access to the VA for injuries that are connected to my service. I do take advantage of that when I can. My insurance has a $250 individual, 500$ Family deductible, and my employer does offer the Health Savings Account and everyone has the same insurance. So far I've spent about $800 this year on medical expenses, so I need to up it next year.

nkt0

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I have access to the VA for injuries that are connected to my service. I do take advantage of that when I can. My insurance has a $250 individual, 500$ Family deductible, and my employer does offer the Health Savings Account and everyone has the same insurance. So far I've spent about $800 this year on medical expenses, so I need to up it next year.

Are you sure you're talking about a HSA and not a FSA? Sounds like an FSA.

Kierun

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Copying my post from your previous thread.

Have you looked at the option of federal jobs?  Those military years would count towards your federal retirement so those 13 years won't be "lost".  You'd just buy back your military time for federal retirement.  You'd have to run the numbers in comparison to your current career path, at 110k/year and 21% increase, personally, it'd be tough for me to leave the private sector for federal.  I'd also consider how stable the career, life balance, growth potential, etc.

Additionally, you might have some funds in the TSP, have you looked to see if you did contribute?  It was a few years after I left the service that I realized I had some money chilling in the TSP.  Considering you were in the same time I was, you probably should have something in the TSP, it might even be in the G fund like mine was automatically.  I'd take a look at this and look at changing it out of the G fund or even rolling it over, but I like the expense ratios for the TSP so I keep it there in a mix of C, S, & I funds. 

diapasoun

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7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.    Again, you don't have any of these.  It feels counterintuitive, but with such a low car loan (assuming you're keeping it), you shouldn't be tossing extra money at your loan every month.  Overpaying your car only gives you a 0.9% return on that money, where it could be better spent maxing your HSA, maxing your 401(k), or funding your Vanguard account (VTSAX yielded 11.8% over the past 12 months).  Sure, it feels good mentally to not have outstanding debts, but if the interest rates are that low, your money can work much harder elsewhere.       

Will come back later when I have more time to go into spending details, but one thing I want to note: Paying off a car early can be very, very worth it if it allows you to change your insurance. Although the guaranteed return on the loan may be relatively small, you can often halve your insurance -- or maybe even more -- if you drop from the type of full comprehensive insurance typically required by banks to liability + self insurance for repairs/replacement. I did this for my much older car just recently, and it's going to save me more than $1500 in insurance over the next two and a half years. That's much more than I would likely have made investing with that money.

Since your car is very new and shiny and expensive, and you don't have a big net worth or cash reserves, self insurance for replacement may not be ideal for you (unless you're willing to significantly downsize on your next vehicle). It worked for me because I could buy a comparable replacement outright with cash -- it would suck, but I could do it. It's an option worth looking into, however.

Ah, I hadn't thought about insurance cost differences.  I'm not sure reducing car insurance would be a large enough change to offset tax advantages on the overpayment money in other places (HSA/401k), or the 10% difference if that money's invested, but definitely something to add to the equation!  (Also, this is why I'm typically just a lurker... :P)

It took me a very, very long time to realize that paying the car loan off would do me better than investing that cash, and that's because the place where it's worth it is a weird, narrow space. For it to be worth it to what I assume is your "average" Mustachian, you already have to be maxing your tax-advantaged spaces and have paid off any of the much higher interest debts while still having a car loan. I was in that weird place.

@wirednuke83, back to your spending!

First, congrats to your wife for making progress.

Second, one thing I've noticed is that these categories are very broad. If it works for you, awesome! But you may find some worth in digging in a little deeper at times to really understand your spending.

Re HSA: You shouldn't be eligible for HSA with only a $500 family deductible. Also, enjoy the hell out of that small deductible.

$700 groceries: With two adults and two very small children, there is room to cut in here, especially if this doesn't count restaurant spending or household supplies. Is there a lot of prepackaged snacks/kid-friendly foods in here?

(I also want to note: This is a GREAT place for you to lead by example, especially if your wife does most of the shopping/cooking, and veeeery especially if she doesn't particularly love it. If you take over some of the work here, you can make the changes you want to make AND take some work off her hands. That combo often goes over well! If she's into it, pick a few easy starter places (e.g. pre-cut apple slices, pre-mixed salads, etc). Join her in shopping, see how she does it (good reconnaissance too for future changes), suggest the small changes you had already zeroed in on, and then follow up at home by doing the kitchen work. Save money, model good spending behavior, AND spend more time with your spouse while taking some work off her hands? This should be an easy win.)

$440 utilities: Why are you watering your grass? Does your HOA require bright green grass, or can you stop watering and eventually replace the grass with something less water-greedy? If your HOA requires bright green grass... well. This is a reason I intend to never buy a home with a HOA.

$1040 transportation. Here is your transportation facepunch. What in here is your payments, and what's your gas and insurance?

$300 a month on kid supplies is $3600 a year. How does this break down? Where can you cut? For example, buying used clothes instead of new; buying different types of gifts; etc.

$300 a month on "family fun" in addition to $50 on entertainment. What counts as "family fun"? Is the fun worth the money? Would the kids have just as much fun playing a silly board game at home with you, or playing at the playground?

$110 Christmas fun = $1320 spent on Christmas. That's a lot of money to be spending on gifts. I'd cut down here. (FWIW, my yearly gift budget for birthdays, Christmas, and everything else is $500.)

*****

For your car question, I have questions for you first.

1. What's your mpg on the hybrid?

2. Why do you drive so much? (Work?)

3. If you drive that much because of work, work out your real wage for your job. Add in all your benefits (insurance premium your employer pays, 401k match, etc), deduct all your real expenses (like gas + wear and tear on car), and divide by your real hours (time spent at work plus time spent driving/commuting and any other time spent doing things you just wouldn't do if it weren't for work). Is your job still worth it at that point?

wirednuke83

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!
« Reply #10 on: July 12, 2018, 02:52:58 PM »
Thank you for the responses!

Nkt0: You are correct, it was an FSA. I didn't realize there was a difference at first. I am new to all this stuff! Never had to worry about it in the military.

Kierun: I have looked into Federal jobs and the Reserves. On top of the 21% raise, I have two additional 10% raises that will follow at my 3 and 6 year point. Also at my 5 year point I become vested in the company and my bonus rises to 35%. As long as I keep my head on my shoulders I should be better off here.

Diapasoun:  I am on my way out the door, and I will respond a little better later!

My categories are less broad in my actual budgeting software, but I didn't want to get too crazy with all the nitty gritties for my post. It was already long.

Groceries: This is one area my wife agreed to sit down and work on. I showed some examples from other case studies with people living off 3-400$ a month and I think it's quite doable. I will take your advice here and try and lead by example and take over groceries.

Kids supplies: This is an area we are working on as well, just like groceries. We had tuition for preschool in here too, but that just ended so I need to adjust this and reevaluate!

Family spending: I just spent the last 13 years of my life being away from my family 80% of the time. It's just making up lost time. I probably should cut back here a little bit as well!

Car: My company is in a very expensive area. In order to afford housing we had to move out about 45-50 miles. I also have to make trips to various worksites as part of my job. Sometimes they are a few hours away. I do get compensated with mileage, but it's very random and so I don't usually include that income in my planning. On my way to work, which is stop and go, I usually average around 56 mpg. On the highway it's not as good, about 43mpg.

I need to do the math you talked about here, I will post again when I have a little bit more time with a more detailed response. The issue is my skillset is very niche related. There are only 2 or 3 employers that I can look to without taking a substantial pay cut, without moving out of state and moving away from family. One of the reasons we left the military was to be closer to family to help with my disabled daughter!

Anyway, I will answer better later. The family is waiting on me!

Thanks,

Wired.

gpyros85

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With 2 kids and the new tax brackets/deductions you shouldn't be paying anything in Federal tax. I am calculating $531/bi-weekly is going to taxes. Can you break this out in your pay stub in detail? What holdings do you claim?

Also, you have good income, max the 401k.

jlcnuke

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Re: Health insurance/health care. As a veteran don't you have access to the VA? Also with a $500 deductible, can you even use an HSA? My understanding was that those are only available to high deductible plansÖ

I have access to the VA for injuries that are connected to my service. I do take advantage of that when I can. My insurance has a $250 individual, 500$ Family deductible, and my employer does offer the Health Savings Account and everyone has the same insurance. So far I've spent about $800 this year on medical expenses, so I need to up it next year.

Howdy from another former Navy Nuke (I was medically discharged ~10 years ago, so I also get the "oops, there goes that retirement plan" situation).

A couple notes on VA care:
The VA will treat you for both service connected AND non-service connected medical conditions, including an annual eye exam and glasses every couple years if you need those. Non-service connected conditions have a copay UNLESS your total rating is 50% or higher, which you seem to be at based on the monthly pay (though you might be just under with some other special monthly compensation. 

Additionally, in many cases they will charge your insurance company for all non-service connected care, even if you don't have to pay anything for it. That may even be applied to meet your max out of pocket and/or deductible amounts even though you don't have to pay the amounts "charged".

Next, I suggest you join the Navy Nuke Job Finder group on Facebook. Tons of opportunities show up there that you may not be aware you are qualified for. Our skillset is very versatile and in high demand for a number of careers you may have never thought about (my official job title is Senior Technical Writer, a job title you've probably never heard of or considered). While most non-nuke jobs may have a slightly lower pay than working in a nuke plant, they also often have better work/life balance to offset that (though I've still been in the low six-figures for most of the years since I got out). You may see something closer to home that would work better for you, or you may not, but it never hurts to be passively looking for other opportunities.

Similarly, keep the people you liked/respected from your time in the Navy as friends on LinkedIn and Facebook. They can be a great networking tool throughout your career. Not to mention good guys/gals to keep up with and/or catch up with (I just had lunch with a couple guys from the boat that I hadn't seen in almost 15 years, still great meeting up with them and hanging out for a bit).

Finally, assuming you have it, be sure to plan to utilize your GI Bill. You earned it, don't let it go to waste like many people do.

wirednuke83

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There seems to be Navy Nukes everywhere I go, and a fellow submariner at that!

I have to confess, I donít know that much about my VA benefits. You are correct though, I am right at 50%. I will look into that more, I work right by one of the VA medical centers so I have no excuse.

I actually got this job on Navy Nike Job Finder. I work in the NERC system operations field, so I am also non-nuke. This was actually a dream job for me, so I donít want to give it up if I donít have to! I am still in training and my compensation will move into the 130-150k realm once I qualify. The other nice thing about it is I typically only work 3-4 days a week.

I have a BS already, Iíve been trying to figure out what i want to get my masters in utilizing the GI bill.

gpyro85: I am only claiming 4 right now. Iíll have to hop on the IRS withholding calculator and see what I can do with the new system.

Thanks again for all the advice! Iím on vacation with the family and donít have my laptop or Iíd write more!

Wired

Re: Health insurance/health care. As a veteran don't you have access to the VA? Also with a $500 deductible, can you even use an HSA? My understanding was that those are only available to high deductible plansÖ

I have access to the VA for injuries that are connected to my service. I do take advantage of that when I can. My insurance has a $250 individual, 500$ Family deductible, and my employer does offer the Health Savings Account and everyone has the same insurance. So far I've spent about $800 this year on medical expenses, so I need to up it next year.

Howdy from another former Navy Nuke (I was medically discharged ~10 years ago, so I also get the "oops, there goes that retirement plan" situation).

A couple notes on VA care:
The VA will treat you for both service connected AND non-service connected medical conditions, including an annual eye exam and glasses every couple years if you need those. Non-service connected conditions have a copay UNLESS your total rating is 50% or higher, which you seem to be at based on the monthly pay (though you might be just under with some other special monthly compensation. 

Additionally, in many cases they will charge your insurance company for all non-service connected care, even if you don't have to pay anything for it. That may even be applied to meet your max out of pocket and/or deductible amounts even though you don't have to pay the amounts "charged".

Next, I suggest you join the Navy Nuke Job Finder group on Facebook. Tons of opportunities show up there that you may not be aware you are qualified for. Our skillset is very versatile and in high demand for a number of careers you may have never thought about (my official job title is Senior Technical Writer, a job title you've probably never heard of or considered). While most non-nuke jobs may have a slightly lower pay than working in a nuke plant, they also often have better work/life balance to offset that (though I've still been in the low six-figures for most of the years since I got out). You may see something closer to home that would work better for you, or you may not, but it never hurts to be passively looking for other opportunities.

Similarly, keep the people you liked/respected from your time in the Navy as friends on LinkedIn and Facebook. They can be a great networking tool throughout your career. Not to mention good guys/gals to keep up with and/or catch up with (I just had lunch with a couple guys from the boat that I hadn't seen in almost 15 years, still great meeting up with them and hanging out for a bit).

Finally, assuming you have it, be sure to plan to utilize your GI Bill. You earned it, don't let it go to waste like many people do.

DoNorth

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First, thank you for your service.  I would pursue the Reserve option if at all possible.  You have invested the time and the best way to ensure that vested time translates to an annuity down the road is by getting your 20 year letter.  In the meantime, if you're like a lot of us that have served, you'll enjoy staying involved in the military even after you've left active duty, you'll earn an extra $10K-$15k/year (assuming you left as an O3 or O4) and you'll have access to some of the military benefits you had before.  Assuming you live near Chicago, you could start using the commissary at Great Lakes from time to time and other on base facilities.  Check out Nords' book "The Military Guide"  It definitely helped me to understand the phases you go through post military and take the necessary time to plan important decisions. 

As far as the numbers go, I would ditch the cars.  I did it with my 2014 Enclave....wasn't easy, but I got $21,000 back from a bad purchase after 4 years of driving it.  Of those 4 years, I knew for 2 of them I wasn't doing the smart thing and did everything I could to justify it was the right thing in my head.  I live in Europe now and drive a 2009 VW Touran that gets almost 60 mpg and honestly, I feel way better driving it than I did the SUV.  Literally walked into a used car dealer, wired him 7000 euro in cash and I'm making great memories in it driving around the southwest of France.  Can't say the same driving a fancy SUV on the beltway of DC. If you had more net worth, I would agree with your principal pay down plan, but since you don't, I'd suggest after maxing the 401K and IRAs, putting the excess in regular investments, dividends etc.  If you're goal is FIRE, then the VA check, plus some drill money and dividends, side hustle income make FIRE a real possibility for you in the not too distant future assuming you consider living in a lower COL area. 

BrightFIRE

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I think you probably want to check out https://the-military-guide.com/ Nords is also a poster here on the forums if you want to reach out to him.

Nords

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Check out Nords' book "The Military Guide"  It definitely helped me to understand the phases you go through post military and take the necessary time to plan important decisions. 
I think you probably want to check out https://the-military-guide.com/ Nords is also a poster here on the forums if you want to reach out to him.
Thanks, DoNorth & BrightFIRE!

There seems to be Navy Nukes everywhere I go, and a fellow submariner at that!
Welcome, Wired, from yet another nuke.  We may be an extremely small part of the American demographic, yet we seem to be disproportionally attracted to personal-finance forums.

You're getting good advice here, but if you have questions about the military side you might be able to find them quickly through the archives at the blog:
http://the-military-guide.com/post-titles-by-month/

I have to confess, I donít know that much about my VA benefits. You are correct though, I am right at 50%. I will look into that more, I work right by one of the VA medical centers so I have no excuse.
It's hypothetically possible for you to join the Reserves or National Guard with a 50% disability rating, but they might be extremely reluctant to bring you in without many reassurances from the medical/physical side.  You might be looking at a waiver process which could take literally 12-24 months and several exams.  The Reserves or Guard can be a good deal, but I'd certainly understand if you felt you had more potential elsewhere and didn't feel the need to get seven more good years to qualify for a pension.

The best way to handle this would be to ask the clinic for the contact info of a Veteran Service Officer (VSO).  They'll look through your VA disability claim file (C-file) and your medical record for any claimed items that may need a rating review.  In addition they can walk you through the benefits matrix for anything else that you and your family could use.  That matrix is hard enough to figure out on its own, let alone when you're in the middle of leaving active duty.

Finally, the VSO can help you with any state veteran's benefits which you might have overlooked. 

I have a BS already, Iíve been trying to figure out what i want to get my masters in utilizing the GI bill.
You're pretty busy with the training pipeline now and it's not a good time to ask, but when your employer finishes with that part of your career then you could ask one of your mentors for advice.  Your VA benefits might pay for a certification like Project Management Professional (PMP) as part of a vocational rehab program (especially when you're doing most of the work).  Another GI Bill option would be a generic MBA or a particular niche like finance.  Many employers are willing to subsidize an advanced degree, especially for a commitment to stay at the corporation for a few years, so they can already give you an opinion on the degree.  The fact that you can use the GI Bill would make them even more interested in helping you advance your education.

wirednuke83

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Thank you all for the responses. I was out camping this weekend, I will read through and respond today!

Wired

wirednuke83

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So a couple things I've looked at this morning:

1) I changed my withholding, and I was able to raise my 401k contribution by 5% without changing my take home pay. I will have to re-evaluate at the beginning of next year to make sure I don't screw myself on taxes. But for now, that's a big win.

2) The car situation. I looked at car insurance prices, and thanks to my lovely state laws (Michigan, we are the most expensive insurance in the country), dropping to minimum coverage doesn't really save me that much. So, with my low interest rate and the 5-9%'sh returns I've been getting. It would seem I'm still better off riding out the loan and investing elsewhere. Or, sell the car at a loss, and eat the 2-3k right up front in cash and then have to use more cash to buy a different car.  This will be an expensive lesson that I will never forget or repeat.

3) Reserves/Federal Job - I don't think they'd take me back with my medical problems. I was an E-7 Nuclear trained Submariner, and my job doesn't exist in the reserves. The few times I've talked to a recruiter about it they were going to make me take a lower pay grade in a different rating. Now that I have my bachelors degree I guess there's always the option of going the officer route. It might be worth seeing what they have to say.

I appreciate all your input. There were a couple great suggestions in there that really have me reflecting on some of our lifestyle choices.

Thanks,

Wired


zoe2dot

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Re: !
« Reply #19 on: July 16, 2018, 08:47:57 AM »

My categories are less broad in my actual budgeting software, but I didn't want to get too crazy with all the nitty gritties for my post. It was already long.


Trust me: we are here for the nitty gritties. 

I never thought I'd salivate over someone posting their cable package details but the personal finance devils are in the details.  Personally I'm in much better shape having shared all the nitty gritty details with this forum because all the little things add up and a lot of the little changes are permanent.  E.g. giving up my storage unit took a shit ton of cajoling but that money is Vanguard's now instead of lining Big Storage's pockets.  Same for the money I saved by switching phone plans.  And calling Geico to lower my insurance.

wirednuke83

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Re: !
« Reply #20 on: July 16, 2018, 09:04:23 AM »

Trust me: we are here for the nitty gritties. 


Here you go then! This is based on Biweekly pay checks...

Groceries: 350 every 2 weeks (We are working on cutting this down)
Eating out: 150 every 2 weeks (We don't always use this, mostly for me attending work luncheons that aren't always paid for)
Gas: 100 every 2 weeks
Household Goods/Kids: 200 every 2 weeks (Ambiguous broad category for clothes, gifts, my wife's "Allowance" for BS purchases because she doesn't completely buy into this yet)
Tutoring: 60 every 2 weeks
Car #1: 179/mo
Car #2: 400/mo
Cable Internet: 60/mo for 100mbit fiber internet
Hulu/netflix/prime/HBO GO: 43/mo
Electric: 120/mo (AC set to 76F)
Nat Gas: 20/mo
Water bill: 200/mo, (We purchased a spec home that didn't have grass, had to water more while it established but now it doesn't take much and this bill is declining)
Car Insurance: 190.12 /mo
Trash: 39/quarter
HOA: 22/mo

Short Term Savings goals:
Back to School shopping: 83/2 weeks for a total of 250$
Christmas Fund: 54.55/2 weeks for a total of 600$


wirednuke83

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One last comment/question concerning my long term goals.

I really like my job. I do something cool, and it has a relatively relaxed schedule. (I only work 10-15 days a month) I think my long term goal is more of a hybrid-mustache. I want to max out my retirement savings so I can leave the workforce comfortably when I decide to do so, but I want to save up a nestegg (Vanguard Brokerage Account) so that my returns will fund my travel/entertainment desires indefinitely. I.E. 4% withdrawal on lets say 400k would give me a 16k a year travel allowance.

Hopefully you guys don't run me out of here for this idea! I guess its more or less having financial independence on standby.

Wired

DoNorth

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Sounds like you're headed in the right direction.  For what its worth, I did the hybrid mustache thing and have gone through many of the phases outlined here.  Medically retired from the Army in 2014, became FIRE for about 5 months, went civil service full time the same year(still FI), hated the commute, job etc.  Found some enlightenment with Nords and MMM, moved to the UP of Michigan, worked PT at a non-profit (20 hours a week) while I honed my carpentry skills and built my house on the lake, and was then offered another full time, term civil service job overseas in 2018.  The military pension made me FI the whole time, but different kinds of work along the way offered me the ability to put more in savings and investments, travel more, and do things I wouldn't have been able to do otherwise.  I slashed the normal stuff out of my budget, but realized quickly after reading a lot here, there is no one size fits all prescription for FI, RE, or achieving a good balance. Ultimately, you have to do what's best for you and your family.

Yeah, that Michigan uninsured driver thing does suck, but if you ever get to 100% VA disability, life in Michigan is very good.  No prop taxes, free vehicle registration, free hunting/fishing, no charge for access to state/national parks, tuition assistance for kids etc.  Keep an eye on your health and don't be afraid to apply again if anything worsens.