Hello everyone!
As many do, I have been lurking around for about a year or so, trying to soak in wisdom, and getting my financial house in order. However, I have noticed that most of the advice kind of is biased to those in a more.. traditional career path. So, I am about to outline my situation and plan, and would love some peer review, especially if there are other/former military mustaches hanging about.
here goes.
Age: 23
Rank: E-4
Terms of enlistment contract: 6 active, two inactive. on year three
Divorced (My chain of command allowed me to stay off post rather than move me into the barracks, hence the BAH)
I finally finished paying off my car. As in, traded it in for a used car I bought for 4 grand cash.
Base pay: 2238
BAS (its a pay for food) 367
BAH (Housing allowance for my area) 1098
FLPP (Foreign language proficiency pay for speaking russian) 300
total in: 4003 per month.
Expenses:
Rent: 400 per month (I rent a room out from a good friend of mine, covers all utilities, internet, cable, ect.)
Phone: 60 per month
Insurance: (renters, full coverage auto) 128 per month. (high because I had a speeding problem a few years back)
Food: 200 per month, (I am a hard gainer, so I tend to buy protein supplements.)
Entertainment: 200 per month (Bars, clubs, dating... dating is expensive man.)
Transport: 100 per month. (I bike to my main duty area, however, three times a month or so I have to drive to a training area a little ways out of town)
total expenses: 1088 per month (discounting things like having to buy the odd new uniform)
4003 - 1088 = 2915 net
I also contribute 20% of my base pay into a ROTH TSP, which I have set at the lifecycle 2050 program, since it seemed the simplest to understand at the time. That equates out to about $500 per month.
2915 net - 500 to tsp = 2415, and after taxes, which are about 520, I have come ahead with about 1895 per month extra.
Now, I want to buy a house, and have played with the option of utilizing a VA loan, however, I have to buy with the knowledge that I will be renting it out after I either PCS (move away) or ETS (leave the military) and the best I can get is a +$150 per month after cost of mortgage, estimated insurance, taxes, plus the projected maintenance, vacancy rates, and property management fees. Not something I am super wild about. I can make the margins significantly better if I save for a 20-25% down, but that may take a while.
I have been juggling betterment vs putting some cash into lending club, both have their pros and cons. I feel much more comfortable investing in tangible assets like property however.
Status of Finances:
6013 in savings
1500 in a 2 year CD, required for my secured credit card. (two years ago my credit score was at 540 with 7 accounts in collections, medical bills from before the military. finished paying them all off three months ago.)
1000 buffer in checking at any point in time for emergencies
2431 in my ROTH TSP
Current Net Worth: 10944
I am also currently enrolled in college, the military is paying my way with Tuition assistance. They have already paid for my associates, and I am working on a dual degree program from Oregon State University, a B.S. in Political Science and a B.S. in Sustainability.. My associates is an Associates of Arts in Russian Language and Culture, from a regionally and nationally accredited institute (DLIFLC). So, if it all goes to plan, by the time my first enlistment is up, I will have my education paid for with no debt/cost to me.
Any advice in how I can optimize/tweak/do something different, is welcome. Thanks in advance.
*update*
After taking into consideration my large savings buffer, I have decided to contribute 60% of base pay into the ROTH TSP option, which falls just above 16K per year. After delving through some more forums and bogleheads posts, I have decided on a 40/40/20 SCI split. If I dont feel too cramped after two months of this, I may add some of my allowances as well. However, I am dating, and young, so I try to allow a bit more financial wriggle room for dating and random drinking with friends.
I am holding off on the house, as much as I love the idea of being a homeowner, and love rentals, I can't justify it to myself. I am glad you all agree.
I will update this thread at the end of the month of June with my results.