This was a post from /r/personalfinance. So the audience there didn't have the same type of military knowledge as I'd suspect this sub does. That is why I had to explain certain things in more depth than I would have to to people who are in the same boat. So pardon me if I come off like I'm talking to people who aren't in the military, because I originally was!
DISCLAIMER: I'm the type of person who doesn't know how to "half-ass" something. So, that being said, excuse my post if it is unnecessarily long and drawn out. I just don't know how to not be thorough. I apologize in advance if you know my entire life story by the end of this post.
I'm a 20 year old serving in the U.S. military. I'm single, and have no kids. I'm currently deployed, so I am making a bit more [tax free] money than I would be if I was in garrison. This opportunity has allowed me to save more money per month than usual. I am not completely ignorant when it comes to personal finance, saving, investing, etc. However, I'm at a point in life where decisions need to be made, and I want to make sure I'm making the best choices I can [reasonably] make.
That being said, let me start getting to what everything here is all about: The numbers.
I am currently making ~$2600 per month (tax free) and I am expecting to get a promotion in the next 1-2 months which would adjust my monthly income to ~$3000 (tax free). Being in the military, and being single without kids, an income like that is more lucrative than it would be for someone who wasn't in the military (I pay no rent/mortgage, food is provided, medical/dental, other benefits/allowances).
I had a solid emergency fund that took care of expenses (which include a car loan, and GP spending) for at least 6 months. It was $4000, but I really could have lived on $2500 for the 6 months. I recently had a family emergency and had to tap into that fund, bringing it down to $1400 currently. I know my first step is to build that back up to at least the $2500 I need, but preferably the $4000 it was at.
Outside of my emergency fund, I am pretty broke. I have about $1200 in my checking account, but I'm not spending much. I think I'm being smart with my money, I just don't have much to show for it. I am trying to pay off my car loan ($16000 left) so I frequently make additional payments on that, ($100-$500 here and there when I have the extra money so I don't blow it on nonsense).
My monthly income will drop in the next few months, however, when my unit is redeployed and no longer in a combat zone. I estimate I'll be bringing in somewhere around $2200 per month (~$26000/yr) at that point (taxable). So the amount of money that I can put towards savings and investments, will go down, and my ability to spend the money (being in an environment where I won't be wearing a uniform 24/7, will have the weekends off, etc...) will go up. Naturally, I'll need to adjust my finances.
So my financial situation isn't ideal. I don't have an inheritance or a trust fund with my name on it; but I'm an average 20 year old, so my situation isn't exactly bad either. I will still be able to consistently save, I have plenty of room for future promotions, and in the military, even putting promotions aside, we can expect frequent raises (slight annual inflation raises, as well as time in service raises which occur ever year or two). What I'm saying is, I'm comfortable now, and I can expect to consistently make more money than I'm making now. Not much more, but it's more.
That brings me to my fork in the road. It's not entirely a financial advice question, it's also a life/career advice question (I told you this was going to happen).
I don't mean to come off as arrogant, but I'm somewhat overqualified for the position I'm in in the military. My GT score (calculated by the ASVAB) is 132, which usually when I tell people, they give me a confused look, and ask me why I joined the military. So in a nutshell: I'm intelligent. Like I said, I don't mean to come off as arrogant, but it's something that needs to be considered when I'm talking about making life decisions. I know I could get accepted to some university somewhere, get a degree in 4 years, get a decent job making a pretty good salary that would outperform my benefits and income combined and blah blah blah... Fact of the matter is, I AM in the military. I enjoy what I do. I'm not here for the money. However, I wouldn't want to waste the potential to give myself a better living if an opportunity presented itself and still allowed me to be in the military. Well, an opportunity HAS presented itself. A recruiter from the United States Military Academy (West Point) sent me an email saying that they are interested in me after reviewing my line scores on the ASVAB. I am extremely interested in the offer and have already taken preliminary action to start the process. However, this sparked a fork in the road for me when I took a step back and truly grasped the bigger picture. If I were to get [theoretically] accepted into West Point, having already served 3 years at the time I enroll, add the 4 years it takes to graduate, and then add the 8 year commitment as an officer upon graduation. That's 15 years of service miniumum that I'm looking at. At that point, it would be stupid to get out and not do the extra 5 years to hit 20 be able to retire from the military and start receiving my pension while I persue another career. I'll 38, and plenty young enough to enter another career in the civilian sector, take advantage of my GI bill, continue to further my education, make myself more valuable, etc...
So, my real question is, is there enough financial value in going this route, knowing that I could get out sooner and potentially make more sooner, but lose out on the pension and other benefits of being in the military? What would you do?
I also know that saving and investing in my future now, while I'm young, is exponentially more beneficial than starting in say, 10 years. However, is it worth it to save less now, as a lower ranking enlisted serviceman, and gradually being able to save and invest more as my rank and time (and income, respectively) grows in the military, OR does it seem more beneficial to get out and get into a high-paying career and be at a place where I can start saving more in 5-6 years compared to where I'd be in the military at that time? The fact that I'll be making double the amount I'm making now upon becoming an officer in potentially 5 years is obviously an attractive offer. But am I being ignorant to the amount I could be making in 5 years if I got out altogether? I hope I'm still making sense, it's just a really important decision I need to make, and any input you have to offer would be greatly appreciated.
DISCLAIMER: I'm the type of person who doesn't know how to "half-ass" something. So, that being said, excuse my post if it is unnecessarily long and drawn out. I just don't know how to not be thorough. I apologize in advance if you know my entire life story by the end of this post.
I'm a 20 year old serving in the U.S. military. I'm single, and have no kids. I'm currently deployed, so I am making a bit more [tax free] money than I would be if I was in garrison. This opportunity has allowed me to save more money per month than usual. I am not completely ignorant when it comes to personal finance, saving, investing, etc. However, I'm at a point in life where decisions need to be made, and I want to make sure I'm making the best choices I can [reasonably] make.
That being said, let me start getting to what everything here is all about: The numbers.
I am currently making ~$2600 per month (tax free) and I am expecting to get a promotion in the next 1-2 months which would adjust my monthly income to ~$3000 (tax free). Being in the military, and being single without kids, an income like that is more lucrative than it would be for someone who wasn't in the military (I pay no rent/mortgage, food is provided, medical/dental, other benefits/allowances).
I had a solid emergency fund that took care of expenses (which include a car loan, and GP spending) for at least 6 months. It was $4000, but I really could have lived on $2500 for the 6 months. I recently had a family emergency and had to tap into that fund, bringing it down to $1400 currently. I know my first step is to build that back up to at least the $2500 I need, but preferably the $4000 it was at.
Outside of my emergency fund, I am pretty broke. I have about $1200 in my checking account, but I'm not spending much. I think I'm being smart with my money, I just don't have much to show for it. I am trying to pay off my car loan ($16000 left) so I frequently make additional payments on that, ($100-$500 here and there when I have the extra money so I don't blow it on nonsense).
My monthly income will drop in the next few months, however, when my unit is redeployed and no longer in a combat zone. I estimate I'll be bringing in somewhere around $2200 per month (~$26000/yr) at that point (taxable). So the amount of money that I can put towards savings and investments, will go down, and my ability to spend the money (being in an environment where I won't be wearing a uniform 24/7, will have the weekends off, etc...) will go up. Naturally, I'll need to adjust my finances.
So my financial situation isn't ideal. I don't have an inheritance or a trust fund with my name on it; but I'm an average 20 year old, so my situation isn't exactly bad either. I will still be able to consistently save, I have plenty of room for future promotions, and in the military, even putting promotions aside, we can expect frequent raises (slight annual inflation raises, as well as time in service raises which occur ever year or two). What I'm saying is, I'm comfortable now, and I can expect to consistently make more money than I'm making now. Not much more, but it's more.
That brings me to my fork in the road. It's not entirely a financial advice question, it's also a life/career advice question (I told you this was going to happen).
I don't mean to come off as arrogant, but I'm somewhat overqualified for the position I'm in in the military. My GT score (calculated by the ASVAB) is 132, which usually when I tell people, they give me a confused look, and ask me why I joined the military. So in a nutshell: I'm intelligent. Like I said, I don't mean to come off as arrogant, but it's something that needs to be considered when I'm talking about making life decisions. I know I could get accepted to some university somewhere, get a degree in 4 years, get a decent job making a pretty good salary that would outperform my benefits and income combined and blah blah blah... Fact of the matter is, I AM in the military. I enjoy what I do. I'm not here for the money. However, I wouldn't want to waste the potential to give myself a better living if an opportunity presented itself and still allowed me to be in the military. Well, an opportunity HAS presented itself. A recruiter from the United States Military Academy (West Point) sent me an email saying that they are interested in me after reviewing my line scores on the ASVAB. I am extremely interested in the offer and have already taken preliminary action to start the process. However, this sparked a fork in the road for me when I took a step back and truly grasped the bigger picture. If I were to get [theoretically] accepted into West Point, having already served 3 years at the time I enroll, add the 4 years it takes to graduate, and then add the 8 year commitment as an officer upon graduation. That's 15 years of service miniumum that I'm looking at. At that point, it would be stupid to get out and not do the extra 5 years to hit 20 be able to retire from the military and start receiving my pension while I persue another career. I'll 38, and plenty young enough to enter another career in the civilian sector, take advantage of my GI bill, continue to further my education, make myself more valuable, etc...
So, my real question is, is there enough financial value in going this route, knowing that I could get out sooner and potentially make more sooner, but lose out on the pension and other benefits of being in the military? What would you do?
I also know that saving and investing in my future now, while I'm young, is exponentially more beneficial than starting in say, 10 years. However, is it worth it to save less now, as a lower ranking enlisted serviceman, and gradually being able to save and invest more as my rank and time (and income, respectively) grows in the military, OR does it seem more beneficial to get out and get into a high-paying career and be at a place where I can start saving more in 5-6 years compared to where I'd be in the military at that time? The fact that I'll be making double the amount I'm making now upon becoming an officer in potentially 5 years is obviously an attractive offer. But am I being ignorant to the amount I could be making in 5 years if I got out altogether? I hope I'm still making sense, it's just a really important decision I need to make, and any input you have to offer would be greatly appreciated.