Just got that DD214 - roast my new 60K budget please

[hopelesslyarminian]

Hi friends, I (30F) just separated from the Air Force and am nervous to be on my own for the first time with less job security. Just moved to Raleigh, NC, accepted a job offer for 60K, and signed a 15 month lease on an apartment that was at the top of my budget range.

I’ve definitely made some poor decisions in the past, and I’m ready to get serious about my finances. My goal for the next year or two is to beef up my emergency fund and pay down my debts, while not being so constricting that I don’t adhere to the budget. I would love to hear your thoughts on what I should prioritize; details of my past sins are below.

Assets

3,000 - Emergency fund in HYSA (APY 4.35%), only a month of expenses. I’m not crying, you’re crying!

2,500 - Checking account with sinking funds (vacation next month, new phone next year)

6,000 - Roth 401K, retirement fund with the military

Part of my lease is a two month’s free rent special, so I will not have to pay rent in April and May (total of 2,530 savings). Thinking of putting 1,500 to car loan, 530 to emergency fund, and 500 to furniture as I only have a bed and desk right now.

Debts

9,000 - Credit card debt at 6% APR (thank you sweet, sweet SCRA, not sure how long I will have that military APR so I will be doing a balance transfer to 0% card if/when it shoots back up to 25-30% APR)

11,500 - Car loan (235 monthly payment at 8.64% for 73 months) that I’m upside down in; got approved to refinance it (118 monthly payment at 5.24% for 63 months) if I can pay it down to 10,000. I plan to refinance it as soon as I have the extra 1,500 to throw at it, and I have 80 days to do so.

6,500 - Student loans at 4 - 6% which are deferred because I’m taking online classes. Seems lowest priority to me.

My proposed monthly budget:

60K salary - 3900 monthly take home pay

Lifestyle - 15% (585)

200 - Eating Out

200 - Shopping

100 - Entertainment

50 - Gifts

35 - Subscriptions

Savings & Debt - 30% (1185)

100 - 2% Retirement contribution (after 1 year company will match up to 5% and I will bump it up)

300 - Emergency fund

75 - Car maintenance

235 - Car payment (will keep paying 235 even if it goes down 118 to throw more money at it)

150 - Credit card minimum payment

325 - Credit card extra payment

Needs - 55% (2130)

1395 - Rent + Wifi + Parking + Amenities fee

200 - Utilities

300 - Groceries

105 - Car Insurance

60 - Gas

50 - Health Insurance

35 - Cell phone

 

[waystosuppress]

@hopelesslyarminian Did you file for VA disability? If you haven’t, getting a rating would be a significant help, even if it just covers a bill or two. 30% for a veteran with no dependents is $524 a month, and of course going higher is immense.

Additionally, are you using the GI bill to pay for school now that you’ve separated? The monthly housing allowance benefit could also give you some breathing room as well. Just a couple ideas to amp up your income outside of searching for new work.

Imo in your shoes I’d try and emphasize your emergency savings and eliminating the higher interest debts, even if it means keeping your entertainment funds more frugal. Some pain now means a lot less pain later.

 

[hopelesslyarminian]

@waystosuppress Great advice, thanks! I‘m in the process of filing for disability and I’m also enrolling at American Military University as 6 credits in their 8 week classes is considered full-time and that’s doable for me while working full-time. So I’ll be using the GI Bill and getting an extra 1K a month as long as I’m doing that… I guess I’m just hoping that I don’t do a huge career change in 10 years and regret using my GI bill now on something that may or may not help my current career path that much.

 

[henrodstone]

@hopelesslyarminian Look into VR&E once you get your rating.

 

[resjudicata]

@hopelesslyarminian You could/should cut back on shopping and eating out until at min you get rid of cc debt. Youre literally budgeting for 500/month with debt that is just milking you.

You have 300$ for groceries under needs-then decide to flush 200$ more on fast food and crap.

I would personally tell my kid they dont need more than a bed and desk- take the 500 on food and shopping and 500/month for furnature and get out of debt in 12 months. You do you man but vacation and a new phone dont seem prioritizing well-with the debt and past choices youre trying to bounce back from.

But im just a mere 32year old almost millionaire with an iphone 10. It calls and texts and ill ride it till it fries- then buy my next brick paid off. - prioritize your shit and stop feeding into the tiktok/ig marketing crap. Once your credit card debt is gone youll be throwing almost 1400 at the next debt then 1600 at loans after car. Youre literally super close you just dont care enough to reach back and punch the debt in the face.

 

[kirag]

@resjudicata This.

 

[hopelesslyarminian]

@resjudicata Hahaha the visual of punching debt in the face is a great one, and thank you for the advice. I agree there is room for improvement, and while being able to go out to dinner with friends a couple times a month is important to me, upgrading a phone that still works definitely isn’t. Thanks for the perspective!

 

[nazaire]

@hopelesslyarminian For motivation, when (because it’s when not if, and potentially backpaid interest too ) the card companies increase your interest rate to (at least) 25%, you’re paying more than $200/month on just your credit card debt INTEREST alone. And that’s not the interest on the other debt.

Your minimum payment in the cc will jump way higher. You are going to be eaten alive by your debt at the proposed budget.

I’m being stark to scare you intentionally because you need it.

Look up Dave Ramsey and get on the baby steps yesterday!! Sell your car and buy something way cheaper. Turn shopping, etc into debt payment and get a side gig to hustle your way out.

Doing these things are your only hope but you can absolutely do them if you make a commitment to be better than your past self which set you up for this disaster.

 

[sheriff]

@hopelesslyarminian Everything seems great, but I see a big problem with this part. You have $500/mo going towards eating out, shopping and entertainment…but only $100/mo towards retirement. I suggest contributing much more to your retirement and limiting your shopping.

 

[hopelesslyarminian]

@sheriff Solid advice, I appreciate the perspective!

 

[lettinggo5]

@hopelesslyarminian You'll survive

 

[hopelesslyarminian]

@lettinggo5 Hahaha thank you for the vote of confidence

 

[sammypxx]

@hopelesslyarminian Is there a subreddit with just these kinds of posts? Similar to Suze Orman's old show segment, "can I afford it?"

 

[hopelesslyarminian]

@sammypxx I also posted in /r/Finance but I wanted to get multiple perspectives, hope that’s okay!

 

[dudebro]

@hopelesslyarminian I could be wrong but doesn’t the VA cover you for health insurance if you’ve been deployed to a combat zone for a year or two?

As for student loans, no GI Bill?

 

[hopelesslyarminian]

@dudebro Interesting, I’m not sure about the health insurance… as for the student loans, they are old, pre-military.

 

[dudebro]

@hopelesslyarminian https://www.va.gov/health-care/eligibility/active-duty/

 

[davidkampisch]

@dudebro Yes

 

[dudebro]

@davidkampisch Yes as in correct or not correct?

 

[davidkampisch]

@dudebro I’m mean if someone says yes that would be confirming a statement