Today, I was listening to Dave Ramsey’s The Total Money Makeover, and he started talking about the debt snowball method.
Essentially, you list out all your debt in a certain order. At the top, you want your lowest payoff amount, and as you ascend through the list, it should end at your highest payoff amount. This used to be done by paying off highest interest rates first, but that made it too hard to get wins right away, ergo many jumped off the bandwagon and gave up.
The concept works like this: While making minimum payments on everything else, pay off your smallest debt first and as fast as you can. Use any extra money you can find or work for without borrowing and kill that smallest debt quickly. Then, when it’s paid off, take the amount you were paying on that debt, and add it to what your minimum payment was on the second one…then kill that one as fast as you can. Then you take the money you were paying on the second one and the first one, and apply it to the minimum balance of the third one on the list, and so on.
I’ve heard of this, but I guess driving my car and listening to an audio book made me a more captive audience this time. That process sounds so simple, I wondered what it would actually look like on a timeline.
Assume a person had the following debts:
$1200 Car ($225/mth)
$4000 Car ($225/mth)
$6000 Credit Card ($150/mth)
$7000 Personal load ($250/mth)
I just made up 4 things here that seemed like legit numbers people might be dealing with. Okay, so here we go. Let’s say this person starts this on January 1st, and finds enough extra money to kill that first one by February 28th.
So that $225 would be added to the original minimum payment of $225 for the $4000 car loan. ($4000-$225-$225)/$450= 7.88 months. So basically, the second one could be killed before September 1…and that’s just combining two monthly payments, that’s not counting any additional money being added to that. So it COULD be done faster.
So on September 1 you start paying $600 per month on that credit card, which at this point should be paid down to $4650. This would be paid off no later than May the next year. So take note, that using these numbers, it only took about 16 months to kill 75% of the debt.
This would get awesome at this point. So now, your $7000 loan has been paid down to $3000, and you’re getting ready to start slinging $850 at that bad boy…without factoring in any extra money you find or work for, you become debt-free (excluding a mortgage maybe…that’s a different topic for a different time) only 3.5 months later. So around middle September…so around 21 months to accomplish this, OR FASTER depending on how crazy you get with creating more liquid cash to throw at this debt. That’s less than two years….it’s not that long.
So if you’ve ever heard this term, it’s legit. If those numbers above resemble anything remotely close to debt you have – if you get serious you can kill all that debt in less than 2 years.
Just for fun – because I feel like I always have to do this. Assume after you were debt free, you invested that $850 in a mutual fund that grew at 7% annually. In 20 years, you would have almost $500,000.00! Think about that – perhaps it’s time to make some changes.
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Every time my unit is in the field, someone makes fun of me for lugging a large rubbermaid tote (gorilla box) to my tent. Usually not long after that, the same person or people are telling me I’m a genius for lugging that tote out there.
Packing for the field has two challenges. First, you need to bring everything that is REQUIRED by your leadership and will be necessary for the training. Secondly, you have to figure out how to fit the stuff that’s NOT REQUIRED without dragging 5 extra bags with you.
If packing for the field is a headache for you, consider using my 3 keys to help you do it better and do it right.
1.) Divide and conquer.
When I pack for the field, I do it the same way every time. First, I get my packing list and lay out everything on that list. This ensures I actually have the stuff, and allows me to see it all at once. Secondly, also lay out any comfort items or snacks/drinks – all that stuff that’s NOT on the packing list. Once you have it all in front of you, start to separate it into 3 categories or piles: 1) Definitely going to use 2) Might use 3.) Probably not going to use.
Another way you can do this, if you choose, is to make your three piles: 1) okay to get wet 2) would rather not get wet 3) absolutely cannot get wet – do it the first way I said the first time, but if you run into problems fitting things into the spaces you have, this might be a good alternative.
Once you’ve accounted for all your stuff, and have your 3 piles, you can move on to the next step.
2.) Determine your “compartments”.
This is actually the most important step, but in order to do it the most effectively, you need those 3 piles. Many soldiers pack differently, and many units have different requirements. My current unit if pretty flexible, as long as your bags and rucks are all subdued/camo you won’t get a bunch of heartache. I have been in units that only allow issued bags and rucks to be used. So, I understand that your “compartments” might be slightly different than what I’m describing, but the principle is the same.
If we’re going to be in the field for a short amount of time, I only bring one bag. If we’re going to be out there for a week or more, I bring 2 bags and my gorilla box. Depending on the size of your piles, you might be able to consolidate further and use less.
I start by packing my assault pack. My assault pack gets the “I will absolutely, without a doubt, use this stuff.” Helmet, eye pro, gloves, ear pro, etc. go into this back as it can easily be taken anywhere with me on short notice. It’s my smallest bag, but not so small that it won’t fit everything.
Next, I pack my “definitely will NOT use” pile into my issued ruck. These piles change seasonally. For example, if it’s July, I know I will not use my blankets, coats, or two layers of my sleeping bag. Any of this stuff that is on the packing list but I’m confident I won’t use, I put them in that ruck (in the main big pocket) and the sleeping bag in the main bottom pocket.
Now I have a pile of “I might use” kind of stuff. This is where I get strategic. For example, I “might” need my wet weather gear. If I do need it, it needs to be easily accessible, so if there’s extra room in my “definitely use” bag, I would put it in there – but I could also use the side pouces on my ruck. The main thing is to know where these things are in case you need them quickly and unexpectedly. Other “might use” items should be split between your ruck and your primary bag based on the likelihood of need.
Bam! you’re all packed. But what about that gorilla box that’s empty?
3.) Lighten your load for movements, live like a king when in position.
When packing to move long-distance (armory to the field, field back to the army, etc.) I keep that gorilla box empty so it’s super easy to move around. Once we are out in the woods, I use my gorilla box like a dresser. This is my completely 100% weather-proof compartment. It’s great for food storage, anything that must remain dry – it’s awesome. Also, it locks, so racoons and other pesky critters can’t run off with your stuff. I used to hate it earlier in my career when I’d go to sleep, and no matter where I put my uniform, it would be wet in the morning with dew or condensation. The gorilla box is perfect for keeping your uniform dry overnight, and helping you get an extra day or two out of it. Even the military issued bags are not completely waterproof, so it’s hard to trust them. Also, individual tents are getting so small, that it’s nice to be able to have that gorilla box outside the tent and not in the way (as opposed to piling all your crap up inside your tent to ensure it stays dry)…if conditions get crappy at night, you won’t have to figure out how to fit yourself and all your stuff inside the tent.
Obviously, there are tons of different ways to do this, but my method had been developed over the course of 17 years. I can’t remember the last time I was in the field and failed to have something I needed. There’s a bit of “I told you so” in me when we wake up in the field and I hear someone say, “All my stuff is wet; it didn’t even rain. What’s up with that?” I just think to myself…”rookie”. This is the most satisfying when its the person making fun of my gorilla box the day prior, and telling me I “pack like a woman”.
I hope you found this helpful. Please subscribe so you don’t miss future helpful posts. As always, feel free to reach out to me, like, and share with your battle buddies.
Looking back through my military career (remember, weekend warrior, not active duty), I can see phases. I was a young and newly enlisted private, working and going to school – broke all the time. As I got older, promoted, and experienced a little success in life – I wasn’t as broke, but my poor life decisions left me relying on that drill check every month, just like in that first phase. When I finally became an NCO, fixed most of what was broken in my life, I viewed my drill check much differently.
It would surprise me if this was unique. To me, I can see where my situations and perceptions were and are like most other M-day soldiers. I’d like to share the potential power of that drill check by running through the numbers. If you fall into one of the phases I described above – you might find these number fascinating.
The earlier you start, the better.
New to the National Guard or Reserves? Feeling broke? Check this out. Whether you’re a student full-time, or working part-time and going to school – or even working full-time and going to school, I recommend you do the best you can to pretend that you don’t get paid for drill. Here’s why.
If you can find a way to survive without drill income, you can make magic with those drill checks. It shouldn’t be that hard…after all, if you’re getting your school paid for, received a big bonus, use Tricare, etc, you might see how these benefits feel like “a paycheck” for drill. That actual income has power you might not understand though.
Pretend you plan on staying in for 20 years. Also pretend your drill check is $200 a month. Let’s not count more money for promotions, additional bonuses, annual training…just play along with this number. In 20 years, you would have earned $48,000. Nice right? $48k just sitting in a bank account if you saved every penny of it? That’s ridiculous though. If you invested every drill check, and experienced the average 7% interest the stock market typically returns annually, your nest egg would be worth $105,276.42 at the end of your military career.
The Thrift Savings Plan can help!
Here’s what’s crazy. If you joined at 18, you’d have this nest egg sitting there at the age of 38. Think about that. Here’s what’s crazier…we didn’t count raises, annual training checks that are much larger, or any active duty money received for schools, orders, deployments, etc.
It gets better though. New soldiers are automatically enrolled in the new blended retirement program. That means if you just put all of your drill check that you could into the plan, you’d be getting free money on top of it because of the match. So I’ll do the math for you. Let’s use that same $200 per month drill check example. Assuming you’re investing all that, 92% would be the max toward your retirement plan, so your 4% of free money would allow you to be investing $191.36 into the retirement account with the match money, and you’d still have an extra $16 left over out of your check to invest. Bottom line is using the free money, you’d be investing more.
In this scenario, your nest egg would be worth $109,150.60, and like I said before, it would actually be more than this once you factor in the raises and all that other extra money.
If you’ve been in a bit, it’s not too late to make some magic.
Right now, today, a soldier can reenlist for $20,000. So let’s say you fulfilled your initial contract. You missed the boat on my “start early” thing, but you have power too. As hard as it might be, let’s say you invested every penny of that bonus after taxes. If somehow you payed the max tax rate on that bad boy, you should still net about 13,200.
Invest that, and in 14 years when you would be eligible to retire, that investment alone (without adding anything to it) would have ballooned to $34,036.65.
Now, let’s say at the same time you got that bonus, and invested it, you started investing into the TSP and investing any remaining drill check money (again – use $200 a month for easy math). Now we’re talking about a much bigger number. $91,946.30 to be exact!
If you’re in this club of folks who qualified to switch to the blended retirement program, you’ be getting that free money from the match. Okay…I’ll do that math too. Now you have $94,077.38.
It takes incredible discipline to do this, but looking at those numbers, especially if you joined when you were very young, this really helps you retire early if you want.
Moral of the story is…
I’m 37. People my age were raised in a period that could easily be described as “as long as I can afford my monthly payments, I’m good right?” In 2008, that school of thought was proven to be quite dumb. That’s not to say that the generation before us that was raised by depression era folks was any better. Their lack of trust in banks and fear of debt of any kind led to many coffee cans of cash buried in the backyard and non-interest bearing cash just being poorly used. The plan should be this simple: invest as early and often as you can. For soldiers in the Guard and Reserves – a drill check can be the key to huge retirement savings, early retirement, and even complete financial freedom.
If you think this stuff is interesting, check out these books.
Including transit, my civilian job demands about 10 hours a day. After accounting for this, I have 6 hours left in a work day.
My wife and I go to the gym an average of 6 days a week. This accounts for about an hour a day – now we’re down to 5 hours.
I have a weird eating schedule. I fast, so I only eat after work until the time I go to bed. Nonetheless, supper + cleanup takes approximately 1 hour. Now we’re down to 4.
Another hour is spent on ensuring our kids conduct hygiene, prepare for bed, eat a bedtime snack, do any necessary cleaning…now we’re down to 3 hours.
My wife and I spend about 1 hour per night by ourselves, watching our shows and unwinding/decompressing before we go to bed. Now I’ve accounted for all but 2 hours.
I don’t think my schedule is special or unique. I think this is pretty average. On the one hand, even if your time you can account for isn’t spent sleeping, in the gym, at work, taking care of kids, eating, and relaxing before bed…I’m going to give you the benefit of the doubt and say you’re just as busy as I am. On the other hand, if we can agree we all have 2 hours of unstructured and unaccounted for time, then it’s what we’re doing with that 2 hours that makes us different.
Before I expound on that concept, let me add that one Saturday a month, I have to work my civilian job, and another whole weekend a month I’m doing my National Guard thing. So even beyond standard workdays, I only have two weekends a month that are “free”. I never stripped down my schedule like this before until I read Grant Sabatier’s book, Financial Freedom. His concept of a side hustle challenged me to take a deeper look at how much time I have a day (hint: 24 hours) and what I’m doing with my time. Read his book; you will learn to look at time in a completely new light and realize how limited of a resource time is. The point is, I was compelled to get back to doing something that made me happy, and realize I did have the time for it – even if it was scarce and I had to dig for it.
Tonight, when my wife bid me goodnight and hit the sack, I went downstairs to make sure my middle-schooler was going to bed also. He was. At this point, it was 9:32pm. I could have easily went to sleep at this point…and I was tempted to. However, I wanted to make sure I published something tonight. Secondly, once I picked this topic off my list and started writing and thinking about it, I started wondering what the ideal schedule would look like to me. What I mean by that is, pretend you didn’t have to work…let’s say you retired (and if you’re young, say you retired early). What does your day look like?
Using the simple math from my day, you have at least 10 extra unaccounted for hours by not having a job…wow. For retirees old enough and lucky enough not to be taking care of anyone besides a spouse, you also get back at least 1, but probably 2 hours that directly revolve around raising children. This means that you have nearly half of a day at your disposal. That is quite a bit of time.
There are three key points I’d like to emphasize after saying all this.
1.) Time is a limited resource for folks who have to work.
If you’re punching a clock for the man, you’re probably spending half the day or more fulfilling that obligation. You might be like me and have only 2 unaccounted for hours…what are you doing with that time? It’s limited daily. Time is restrained on a daily basis.
Tonight, I decided I’d sacrifice some sleep and make this post happen. There are other nights I’m dozing off on the couch and can’t get to bed soon enough. What I’m proud of, is I pay close attention to my body and mind -if I need the sleep, I go for it. If I don’t, I try not to waste any extra time sleeping. Either way, I try to get the most bang for my buck when it comes to time – and I could do better. How do you fare in this category?
2.) Time is a limited resource for folks who don’t have to work.
If you’re retired and NOT punching a clock, you’re probably trying to figure out how to spend HALF your day. This daily allowance of time might seem like a surplus, but nobody lives forever; it’s limited by your lifetime. We all have an expiration date.
Age drives the levels of expectation for this group. If you’re retiring in your 50s, you’re probably more ambitious than folks retiring in their 70s. The number of children, grand children, and even great-grand children an influence on this “business” or sense of purpose. Thanks to my military career, I’ll probably be facing this time puzzle in my 50s (58 1/2 to be exact!). I have dozens of ideas on how I could spend my time and make money; what are your ideas? What will you be doing?
3.) Time is a limited resource for folks who choose to work, but it’s not so bad!
In the “old days”, folks in my first key point were younger than 55-60, and people in my second key point were older than that. Now, people (not enough, but some nonetheless) are following Grant Sabatier’s lead and saving more and investing more earlier and retiring at very young ages…meaning they work when they feel like it and only do what they want for work. Time certainly applies in the same ways above, but much less aggressively.
I’d love to say I’ll turn 40 and be in this club; it’s not going to happen. If you’re in this group, you figured out “your number” and you’ve already hit it. At this point you’re watching tv and listening the crazy people arguing about how to spend your money and how bad the government wants to screw you. I plan on putting some more pieces out for this group (or at least about this group). To make sure you are in the loop, I encourage you to subscribe. Please like and/or share if you know someone who can benefit. I’ll catch you in the next blog, but hopefully sooner than that, in the first ever Civil War
Good news! Your age and length of service will largely determine WHY this post is relevant to you, but anyone actively serving will benefit from reading this. It’s never too early to start thinking about and saving for retirement. There’s some toxic old-fashioned thinking out there that says for those of us that have been in long enough to get the fixed-benefit pension (Legacy), that we’re good to go. That’s not exactly true. Likewise, for the younger generation of soldiers who are in the new Blended Retirement System (BRS), you’re getting some equally toxic information from the same crusty old soldiers who think they know what they’re talking about and certainly mean well, but when it comes to this kind of stuff you really have to fact check those guys.
Here’s my main point. No matter which group you’re in above, I would highly recommend contributing to the Thrift Savings Plan. For Legacy soldiers, it’s icing on the cake, and for BRS soldiers, it equates to free money. The magic if compound interest makes both recipients free money, but BRS gets a government match additionally. My purpose in this writing is to compel Legacy soldiers to contribute to TSP, and for Legacy and BRS soldiers already contributing to give more than they are now.
For anyone who currently doesn’t contribute, go to MyPay and login. On the Main Menu you will see an option for “Traditional TSP and Roth TSP” – this is where you can go to start contributions, it’s that easy. Before you do it, it’s important to understand the difference between Traditional and Roth. This is one of those topics where you’ll start hearing that toxic old garbage advice get thrown around. Traditional and Roth are not complicated concepts, but they can become that way if too many people get in your head with bad or misinformed advice.
So let’s take a quick moment to go over the differences. Traditional means they take it out of your check before you pay taxes on it. That means when you’re retired and drawing it out as income, they will tax it then. Roth means you pay taxes on it now, therefore when you take it out as a retiree, you don’t pay taxes. Most people will make less money as retirees, and therefore be in a lower tax bracket, so it’s usually best to do Traditional and benefit from tax deferment now, and a lower tax rate later. If somehow you suspect or know that you will make MORE money as a retiree, then a Roth might be better for you because as a retiree you’d be in a higher tax bracket, and drawing tax-free money would benefit you tremendously in that situation. Some of us, perhaps most of us, are not sure. For this group in the middle, it might not be a bad idea to do both. You can contribute to both, you don’t have to pick just one. This is the case for many civilian 401k plans as well.
Truth be told, it’s more important to start saving early and often than it is to get this Traditional versus Roth thing figured out right away. Once you get closer to retirement, there are many ways you can convert funds to avoid tax exposure. Fortunately in America, rich people write the tax laws, which usually means they have hidden countless ways that are totally legal in which you can “launder” your tax exposure and liability – so don’t get too wrapped up in the details. Just save as much as you can as early as you can.
So, back to you Legacy soldiers. It’s great that you have a fixed benefit pension coming your way when you turn 60 (minus any years deployed post 9-11). That’s great, but here are some things to think about. Let’s say you’re 36 years old and nearing military retirement. When you turn 40, you’ll have 20 years in and be eligible to retire. Congrats! Depending on your rank and points, you could collect anywhere from $800-$1600 per month (just a rough estimate – don’t freak out), but not for another 20 years after you retire! So as a 36-year-old with 4 years left you decide to start putting $100 of your drill check into a traditional TSP. Check this out…if you did this, that 4 years of contributions would be worth an estimated $5700 when you retired, and without touching it, it would be worth over $22,000! Better yet, if you took your $5700 and rolled it into a civilian or personal plan and continued to feed it just $100 per month, it would be worth almost $75000 – not counting anything else you’ve got going on with civilian retirement, etc. So naturally, in this example it truly benefits you to not only reduce your taxable income, but have more money to add to that fixed benefit pension when you turn 60. As a retiree, you could damn near live off that $75k for two years! Or allow it to keep compounding and grow…but at least you have options. When you factor in inflation, our money will be worth less in the future, so we have to understand it will take more money in the future to equal the same as now. If you could live off $40k per year, that’s great, but $40k in the future is actually going to translate to a higher dollar amount to be the same. Saving more earlier is critical.
Now, you folks that opted in or were forced in to BRS, you have a different math problem. Traditional advice says always give at least what it takes to get the free money. So you think your reduced fixed benefit will be strengthened by your TSP because you’re giving the amount necessary to get the match. That’s not always true. First of all, anyone enrolled in the BRS that’s not contributing anything is giving away free money, so indeed, get to the 6% or whatever it is right now to get the free money, but I’d like to compel you to give more. As a soldier in the National Guard or Reserves, 6% of a drill check is not very much money at all, so if you’re getting half that matched, that’s fine, but it’s not that much money. Here are two examples to demonstrate the difference. I will not account for the match – this is strictly dollars you’ve invested. In the first example, a soldier gives 6%. That comes out to a rough average of $37 (less for lower ranking, more for higher ranking). Assume you start this on day 1 of your military career. You would only be contributing $324 annually from drill checks. That would translate to $14, 212 by the time you did 20 years in the military…and roughly $55k when you hit retirement age and could start collecting. That’s barely a year’s worth of expenses!?!? Now, pretend you just got in the military and don’t want to count on your drill check as income. So you wisely contribute 25% of your drill check to a TSP. That would be roughly $112.50 per month, and $1350 annually. When you completed 20 years of service, this plan would net you about $59k (in the first method, you’d have to be 60 to have that much saved). Better yet, in this scenario when you turned 60, it would be worth $229k or more! So you see, there’s a huge difference when you jack up your contribution.
For soldiers, no matter what category you’re in for retirement, the math is simple. Save early, save often, and you will save more. You don’t need to pay someone to help you with that. If you found this helpful, please like and share with a fellow soldier. Feel free to contact me if you have a question, and don’t forget to subscribe!
I could probably devote all my time to blogging about military matters and never run out of topics. A military career is something soldiers should be proud of, however, too many of us get half way to retirement before we realize how much money and opportunity we left on the table because of bad information or inability to properly prioritize.
Taking a quick inventory, I was able to come up with a short list of what I believe to be the most important military benefits that Guardsmen and Reservists should absolutely be taking advantage of.
No benefit outranks this one. If you’re eligible for Tricare and not using it, you are wrong.
I’m not going to bore you with specifics, but I’ll tell you that I’m not sure there’s a better insurance plan on the planet besides being a billionaire and just paying cash for any medical needs. Tricare has low premiums, low deductibles, excellent coverage, and seems to be accepted pretty much anywhere. I cover my family of seven for less than $220 per month, and rarely spend more than $500 out of pocket on any given year. If this were the only benefit of being in the military, it would still justify doing as many years in the military as they would let you stay! Healthcare costs seem to perpetually rise annually, while Tricare’s premium actually went down a couple bucks last year. I don’t care how good you think your civilian insurance might be, odds are, Tricare is probably better. Go sign up now by clicking here.
2.) Education Benefits
If you’re a soldier, and you’re paying anything out of pocket to go to school, you are wrong.
This is tricky. Upon swearing in, most soldiers know by the end of their Advanced Individual Training (AIT), that they will qualify for some school money. The challenge is for those soldiers who are not students yet upon joining. They know in the back of their minds that the school money is good and important, but when you start talking financial aid and school finances, for anyone that hasn’t dealt with it directly it can be very confusing. So imagine the confusion when a soldier graduates AIT and goes back to M-day status (monthly drilling) and tries to enroll at their local college or university. Anyone who has gone to school knows it’s not exactly simple. First you have to fill out a Free Application for Federal Student Aid (FAFSA). This will determine if you qualify for any financial aid outside the realm of the military, including student loans. Then you have to find your school’s Veterans Benefits Counselor (titles vary). These people are experts, so do what they say. Depending on what’s in your contract, you might qualify for more school money than you were aware. It’s important to utilize that resource at the school and get help from within your unit too (find an old-timer like me that’s done all this before). You need to know how many benefits you are qualified to use, and use them in the proper sequence to maximize all your benefits and get the most extra dollars in your pockets.
For example, if you are a new soldier and freshly graduated AIT, you probably qualify for Chapter 1606 Montgomery GI Bill benefits. If you’ve deployed, you qualify for an even better package (Post 911 Chapter 33). If you were previously active duty, there’s another package (Chapter 30) that might be your best option. Here’s the thing though, no matter what state you serve in, you probably qualify for additional state-funded tuition assistance, federal tuition-assistance, and even in awesome states like Wisconsin, it has it’s own state-funded GI Bill. Failing to take advantage of any programs you’re qualified to use is simply leaving money on the table.
3.) Thrift Savings Plan
If you’re not putting some money from your drill check into a Thrift Savings Plan, you are wrong.
The military just recently changed it’s retirement compensation plan. The downfall to that is anyone forced into the new plan is now at the mercy of the stock market and cannot rely on the same fixed benefit once they become eligible to start getting paid. The good news is that any long term investment in the stock market does just fine, and any of your money that’s not tied up in the fixed benefit portion (meaning any money in your Thrift Savings Plan) is portable.
For those of you that don’t know, the Thrift Savings Plan (TSP) is like a government 401k. You can choose to have pre-tax or post=tax money saved from your drill check that gets invested through this program and grows until you retire and are ready to start collecting. That’s the simplest way I can put it, but here’s the cool thing. If you only do 8 years and decide you’re done, now you can take any of that TSP money and roll it into a new plan. In the old days, if you didn’t do 20 years, you got nothing for retirement unless you voluntarily contributed to TSP.
Why does this matter? Every dollar you invest toward retirement matters. Every. Single. Dollar. Under the new Blended Retirement package, the government if matching money, so by not contributing, you’re missing out on free money. Secondly, it’s portable, so if you don’t stick around for a full 20+ years, you can take your TSP money with you and roll it into a civilian job’s 401k plan or go to your local bank or credit union and roll it into an Individual Retirement Account so you can continue to grow that money. You can set up TSP contributions right now by logging into MyPay.
These are what I would consider the big 3 under-utilized military benefits (for weekend warriors like me). There are more though that are worth discussing in future posts, such as the life insurance (both SGLI and SSLI), and other perks/benefits. Please like if you found this helpful, and subscribe so you don’t miss any future posts you might find helpful. I appreciate you taking the time to read this!
*I do plan on posting some more in-depth information on these benefits and more, and once I do, I will provide a link to the more in-depth analysis on this post in the appropriate sections. I hope you will read those too!
Not too long after moving to Wisconsin and getting my personal life put back together properly, I decided that I really needed to finish my degree. Fortunately, the beautiful and charming campus of the University of Wisconsin – Eau Claire was very close and awaiting my enrollment. I was excited. Although I’d been in and out of school for over a decade at this point, I felt very optimistic about being able to close the deal this time and earn a degree. I eventually did, and even gave the graduation speech!
Things didn’t go very well right away though. Being an older non-traditional student was getting…eh…more noticeable the longer I went without graduating. It was okay being in my twenties, after all, you’re not much older than other students at that point. Being in your thirties though, that’s a little different. How different? Let me tell you.
I guess I’ve always been punctual, but after joining the military and being employed in logistics long enough, being on time means being early. If you’re not early, you’re late. Lombardi time we call it – you have to be 15 minutes early to everything. So naturally, the second time I ever stepped foot on the UWEC campus, I was 30 minutes early to my orientation. The kid handing out name tags and some campus garb looked at me like I was stupid when I tried to check in. “Well, we won’t be kicking this off for at least another 30 minutes or so…so if you want to go downstairs and get some coffee…or whatever…you can come back in 30 minutes,” he told me nervously, like I was going to kick his ass for saying it.
I obliged and went downstairs. The commons area, or student union, was very impressive. The building was almost brand new at the time, and it was obvious. There were coffee shops, snack stores, a campus directory, a two-story fire place, a piano….this place was very nice. Before I knew it, I had purchased a coffee, drank it, and sat by the giant exterior windows admiring the campus. Only 15 minutes had passed. So I got another coffee and patiently waited a few more minutes before reappearing upstairs to try to get through the sacred gateway. The kid who rejected me earlier looked annoyed that I was there again…early again…but allowed me to enter. 30 minutes later (and if you ask me, 30 minutes late) the orientation started.
I sat there and soaked it up. I was so interested in everything. It all seemed like such relevant and important information. Like a true nerd, I was taking notes, emailing myself reminders about things I wanted to research – it felt so good to be a student again – until it happened. Apparently, if you slam two 20 oz coffees in 22 minutes, your body is able to turn it into urine in about 15 minutes all at once. I could feel 40 oz of coffee trying to make its escape. It was all fun and games until 30 minutes had passed and I was nearly to the point of tears. I say that because the guy in charge said, “We would normally take a break right now, but since we’re a little behind schedule we’ll go ahead and finish up this last part before we start the tour.” I was in pain.
Somehow, I survived to the end, and once dismissed, I waddled to the bathroom that was thankfully pretty close. I’m pretty sure I set a world record for undoing a belt, button, and zipper. It’s hard to describe the beautiful feeling of finally answering nature’s call that I experienced – but it was short-lived because I ran into a different problem. I was peeing so hard and fast, that it was splashing off the back of the urinal back onto me. I backed up a few steps, and erupted with laughter. Picture this…I’m standing about 3 feet from a urinal, further back than the dividers cover so I’m essentially in the middle of the bathroom, launching the equivalent of fire-hose-pressured amount of urine at the back of a urinal, and I’m belly laughing. It must have been a funny site. I was so wrapped up in finally feeling relieved, and laughing at my own paradox of the ultimate relief juxtaposed with the fact that I was basically splashing my own pee on me that I failed to notice the poor young kid who had left the stall at the far end of the bathroom…the poor young kid who halted in his tracks because I was laughing and peeing all over the place and blocking his access to the sinks. He didn’t seem entertained or impressed, just a little nervous. I was embarrassed. What a creepy old man I must have looked like.
Later that day, a young girl came out of a bathroom during the tour and tapped me on the shoulder. I didn’t notice how weird it was right away…but she came out, looked around, and walked straight to me like she knew who I was. It turns out she just thought she knew who I was. “Uh, sir? Excuse me? Um, someone just threw up on the floor in the bathroom.” As she walked away looking very satisfied that she’d done a good deed by letting the janitor know someone puked on the floor – I realized that the I obviously looked old. This girl thought I was a janitor – either that, or I looked like the kind of guy who would be cleaning up puke in the bathroom. Little did she know I just pee all over the place.
I survived it, and I owned my age. One day, my fatherly instinct kicked in. In one of my classes, we broke into groups and had some assignments we had to complete individually, then convene as a group and use them to turn in one big group thing. The first day we broke out into our groups, I couldn’t help but notice the young man next to me smelled like a combination of a Greek restaurant and a gym class. It hit me like a brick, and it was suddenly my turn to talk. I cleared my throat, turned to the stinky kid, and said, “Listen, let me do you a favor. Most people would not tell you this, but I care about you and you need to know…you stink man.” Before I could continue, he immediately went to his defense, much like my kids try to do before I’m finished saying what I have to say. “I know man, I woke up late and just left – I slept in these clothes last night and…”
“Stop, ” I said. “Just stop. First of all, you’re like 18, so I don’t want to hear it. You live on campus, and this is a night class. You had all day to take care of this. I’m married, I have 5 kids, a full-time job, and a military career, and I do not ever miss a shower. You don’t need to do it for me, but I’m just trying to help you out…you know…don’t ever want to show up for a date in this condition…I just wanted you to be aware.”
Class was never the same after that. You know what though? That kid never smelled like foul balls ever again on my watch.
I felt really old in Macro Economics. While most kids were skipping or sleeping through that class, I was completely invested. I loved that class until 3/4 of the way through the semester I realized my professor was about 5 years younger than me. Not cool.
Being old is “Duff” sometimes, man. If you enjoyed this and found yourself chuckling at my expense, there’s plenty more where that came from. Please don’t forget to subscribe, like, and if you are feeling extra ambitious, leave a comment. Until next time…
I am a proud participant in the greatest fantasy football league in the world. That is not hyperbole. If you don’t believe me, go check out the Oil for yourself; prepare to be amazed.
During the earlier years, commissioner Justin C. Cliburn was blazing a trail other commissioners could only try to follow. We didn’t just have fantasy football teams, we had personalities, and logos, and uniforms. Justin essentially created an entire alternate universe. I still envy his vision. One thing that didn’t survive though, was our podcast.
The Dead Ball Foul Show was originally launched to entertain the 14 managers in our league. We used it to recap the draft, and provide weekly updates and analysis on the happenings in our league. Justin and I partnered with Josh Hastings and served as the three-headed-monster that dished out weekly fantasy analysis. It didn’t take long for us to realize that if we broadened our commentary, the show could help anyone outside the league with their fantasy questions. The podcast blossomed into something bigger than we ever intended it to be.
Eventually we spent half the episodes on fantasy football, and the other half talking about everything else. Our jokes, social commentary, and side-bar conversations became more popular than any football talk. It was unrehearsed, spontaneous, and fun. Listeners provided feedback that instigated us to keep pumping out shows that were completely non-football related. Although we weren’t professionals by any stretch of the imagination, nor were we able to all three agree on where the show should go – and as life happened, the show fizzled out. Being an rookie and sort of in a complicated place in my life at that time, I wouldn’t say I’m proud of the product, but I miss doing a podcast.
Recently, I started laying the groundwork for a new podcast. I’m calling it Civil War. The concept is to get two guests on each episode who I know have opposing opinions on a specific topic. I want to promote a serious, but non-combative discussion. I’m hoping to use my blog as my platform to expand the conversations. I am interested in virtually everything; it’s a flaw. I don’t think I’m unique in this respect though. Not every conversation has to be a debate, nor does every interesting topic need to be political. I’m hoping to craft honest and passionate commentary as a podcast host, and get even more in-depth commentary using blog posts after each episode.
You know what drives me crazy? I hate it when I watch a political debate in any capacity where a very complicated question is asked, but only 2 minutes are given for a response. It’s like asking a presidential candidate, “In 2 minutes or less, explain your position regarding a solution for the rising cost of healthcare.” Anyone who thinks they can intelligently answer a question like that in less than 2 minutes does not have an answer worth hearing. Why not spend the appropriate amount of time on topics of that magnitude? That’s what I hope to do, but with a variety of categories, not just political ones.
I’ve spent the last few weeks trying to get organized. I launched this blog, started prepping for the podcast, started talking to potential guests…I’ve been busy. I’m excited to see the product after all the hard work. I hope you’ll join me for the journey. The best way to start is by hitting the subscribe button for this blog, and checking out the new podcast; I hope to have an inaugural episode launched soon. I would love to hear ideas for shop topics.
You can help Duff by kicking in a few bucks to help purchase, upgrade, and acquire the necessary tools and equipment to help him launch his new podcast, Civil War.
It’s hard for me to think of a bigger way to waste money than buying a new car. For starters, vehicles immediately and almost permanently depreciate in value. Worse yet, by the time a salesperson has bamboozled us into buying something, we drive off the lot owing more than the vehicle is worth. This isn’t just a bad business practice, it’s problematic when it comes to insuring it, and getting any return on the “investment” is virtually impossible, even in the form of happiness. This especially goes for brand-new cars, but even when you think you’re doing the right thing and buying a used one, you’re probably getting screwed.
In a perfect world in which we were all sound consumers and personal-finance gurus, we’d be catching buses and trains, walking, or riding bikes. Public transportation is not available everywhere though, and for many of us, a vehicle (or two in some cases) is a necessary evil given the distances that must be traveled.
I have compiled 7 best practices to help those of you who absolutely need a vehicle to make the best decision and get the best deal. I want to make it clear that I’m not advocating taking this advice and running out to a dealer and buying a car. On the contrary, if you have a dependable vehicle (especially if it’s paid off) you need to drive that thing until the wheels fall off. Take care of it, clean it, change the oil, and do the proper maintenance checks and services. After all, every month you don’t have a car payment is essentially an opportunity to do something else with that money you’d otherwise be forking over to a bank every month. When the time comes where the wheels actually do come off your cost-effective ride, use these 7 best practices to get yourself the best deal you can get.
1.) Start early and determine your needs.
It’s a good idea to always take inventory of what you need from a vehicle. For example, if you are married with five kids, a vehicle probably needs to seat all seven of you safely in order for you to go anywhere as a family. Additionally, and I speak from experience, if you have five younger kids, you might decide that leather interior is a must given it’s easy-to-clean qualities. If you’re like me and live where the winters can be rough, you might need a rig with all-wheel-drive. There are many variables, and for this reason, it’s important to know what you have to have, want to have, and what you could live without. Perhaps you have a decent vehicle that’s paid off and approaching 250,000 miles. I don’t care what logo is plastered on the side of it, when you get that many miles on a car, it doesn’t hurt to at least start looking at what’s out there – my 2004 Ford Expedition was dependable, reliable, and served every purpose our family demanded. Yet, my love for that vehicle couldn’t save it from a scary rod-knock when it hit 240,000 miles. It had been paid off for years – one of the only reasons I could tolerate the high cost of fueling it. When it unexpectedly died, I was not prepared, and it complicated my vehicle search. I ended up buying a very fuel-efficient 2017 Ford Fusion, which I ended up regretting for two reasons. First of all, as soon as the Wisconsin winter hit, I got stuck two or three times in as many weeks trying to get up the hill to my house. I love the car…but I don’t love it in winter. Secondly,it only seats five. My wife and I have five kids…and she drives a van so we can all fit in her vehicle, but the van has been stuck a few times this winter too. Had I taken proper inventory of our needs, I would have just taken over the van as my daily-driver, and put her in an all-wheel-drive vehicle that was also more fuel efficient than our van. My experience is just one example of why you need to know what you want/need even before you start looking. Make a list and take inventory.
2.) Determine your budget.
Trick question: How much can you afford per month for a car? If you just answered anything over $0.00, you are going to fail when you show up to the dealership. When a salesperson approaches you at a car lot, one the first few questions he or she might ask is that very same question. “What are you looking to spend a month?” they ask. That is a trap. Never answer that question…never ever ever. Those salespeople can quickly convert your answer into a sticker price – one probably higher than you want to pay and/or higher than you should pay – and they know how to make it all work after that. For example, if you foolishly answer that question and say, “Well, I really don’t want to spend more than $250 a month.” – they can quickly calculate $250 multiplied by 12 months per year multiplied by 5 years is $15,000 – and they know if you buy one new enough they can stretch the financing out over 6 years, so they can try to sell you an $18,000 vehicle – and then when you get to the financing office and realize that you haven’t accounted for interested they can say, “Well, that only makes the monthly payment a little more, you can do that right? Who can’t come up with a few extra bucks every month?” Don’t set yourself up for failure. You should be more concerned with the overall price of the vehicle compared to what it’s worth, and if you’re financing, the interest rate and term. I remember when my dad was helping my buy a vehicle once, and he went to the car lots with me. A salesperson asked how much I was willing to spend a month. My dad, the best car-buyer in America, said without missing a beat, “$5.00 per month, unless you have any free ones in back.” My dad is so awesome. He taught me all this stuff. It might frustrate the salesperson when you don’t give up that magic number he or she is looking for – but just be polite and stick to your story. Declining to say what you’re willing to spend a month might result in the follow-up question, “Are you paying cash? Or are you actually financing?” Again, this is irrelevant. How you plan to pay has nothing to do with how much any car is worth or what you should pay pay for it. I would advise everyone to drive cars they could pay cash for – there are tons of vehicles you can get for a couple grand that would last a year or two. Remember, every month you don’t have a car payment is essentially money in the bank. However, if you are in the position in which you have to start looking, have a secret number in your head. If you don’t want to pay more than $250 a month, fine…but don’t let them know that…just know that you are looking for a vehicle $15,000 or less. That’s a good starting point.
3.) Search inventories.
The internet is so awesome. You can do 75% of your car shopping from your couch. Dealers have made it ever-so-easy to filter your search and find what they have. For example, you could search for vehicles with less than 50,000 miles, less than $15,000 in price, and enough room to seat five. In less than one hour, you can have a list of two or three cars at each lot you might be interested in. Narrowing your search down at home can save you quite a bit of time at the lots, and help prevent a salesperson from trying to steer you toward a vehicle that doesn’t meet your criteria. If one particular lot doesn’t have anything you’re interested in, don’t waste your time going there. If you are following the advice from the first best practice I listed, you should be in no hurry – meaning you have time to check daily or weekly on the internet and vet your choices on the weekends as you have time – but by no means would you want to buy a vehicle the same day you found it. Buyer’s remorse is a cruel reminder of how impulsive we can be. If you’ve ever purchased a vehicle, you probably know exactly what I’m talking about. 6 months after you purchase a car, the newness wears off, and you get your first door ding, and suddenly it’s not nearly as satisfying as when you first bought it. Then, you suddenly feel like you’re stuck with it, especially when you realize how many more years you’ll be making payments on it. Starting early allows you to search inventories over a long period of time, which can help you find the perfect car for you, or know which ones have been on the lot the longest (FYI: the longer a car sits on a lot, the better deal you can get on it).
4.) Determine NADA trade-in value.
This number is huge. It’s the most important number you need to know after reviewing inventory and starting a list of potential cars you might buy or be interested in buying. Most people somehow have become loyal to Kelly Blue Book. That’s fine – but NADA is better for two reasons. First of all, it’s what banks use to determine values when approving loans for vehicles. Secondly, because of the first reason, car lots use NADA to determine the top dollar they will spend on any one vehicle. For example, if one particular vehicle in excellent condition has an NADA trade-in value of $17,959 – you can safely assume that the dealer did not spend one penny more than that amount when it was purchased at auction. You need to know that, especially when you are looking at this vehicle and see a sticker price of $21,999. Getting the NADA trade-in value is easy. Google NADA (watch out for the ads, there are many sites pretending to be NADA, but you want the genuine article). Click here to see. Please note that you’ll want a very specific list of what features the car in question has and doesn’t have in order to get the most accurate data from NADA. Now, it’s fair for the dealer to sell the car for more money than it was bought for at auction – but we the consumers have to draw the line somewhere. If you are looking at a vehicle with an NADA trade-in value of $14,999 – you should expect to pay more than $14,999, but how much more is completely up to you. When you see that vehicle with a $19,999 sticker price you know they’re trying to make $5,000 off you. Your job is to talk them down as close to that $14,999 as possible. There are other factors that will play into this, but the main take-away here is know how to look up the NADA trade-in value to determine how much the vehicle is worth that you’re looking at.
5.) Decide if you’re trading-in, putting money down, both, or neither.
In this section, you will notice I refer to “the difference”. The difference is the price of the vehicle you’re buying, minus any trade in value or money down. For example, if you agree to pay $20,000 for a car, but you are trading in a car and getting $3,000 for it, and you are putting $1000 cash as a down payment – then 20-3 is 17…and 17-1 is 16…so the difference would be $16,000. The difference is the number you are financing (or paying cash for if you’re awesome). Knowing in advance what your intentions are can help you do this simple math to make pricing determinations. For example, if you look up the NADA trade-in value on your current vehicle and determine your car is worth $4,000, and you know you have $1,000 cash to put down, that’s $5,000 of spending power. So if you see a car you really like, and it’s got a $20,000 sticker price, you know right away you could finance it for $15,000…and the lower you haggle that sticker price, the better you’ll be doing. The power of your trade-in and/or down payment can’t be the factor that keeps you from being upside-down. Upside-down is another way of saying you owe more for your car than it’s worth. That’s a bad situation. First of all, if you total that vehicle, insurance will only give you what it’s worth. If you’re upside-down, then that insurance check won’t replace your car with one just like it. This could also cost you a higher insurance premium. Like I said before, the best way to be is debt-free when it comes to vehicles, but if you are in a situation that warrants a car payment, your goal should be to finance the lowest amount possible below what the car is actually worth. When my wife and I bought our van, it had a sticker price on it of nearly $22,000. It was worth, if I remember right, only about $17,500-$18,000. We were able to get the price down to $19,200. We got $3,500 for our trade, and we put $2,500 down. So although the price we negotiated was still roughly $1,200-$1,700 more than the vehicle was worth, our $6000 buying power lowered the difference to $13,200. So we financed the vehicle for way less than it was worth. This was a pretty good win for both sides I think. The only way we could have potentially done better was wait…
This is simple. Never be desperate, never be in a hurry, and never say yes to the first thing. It’s extremely common for the salespeople to get you in the finance office filling paperwork out for a car you just saw for the first time. Most of these folks receive commission, so cut them a little slack – this is how they put food on the table. However, do not let high-pressure tactics fore you into a deal you don’t want to do. Your most powerful hand you can play is the waiting game. For example, if a car has a sticker price of $22,999, and you immediately talk them down to $21,000 – there’s a reason. Perhaps it’s sat on the lot too long, or perhaps there’s a mechanical reason, or maybe they’re tactic is to cave a little right away and get you to say yes. Learn to say, “I need to think about it some more.” Don’t let anyone make you feel like a moron because you value the money you worked hard for. Let’s face it, most of us don’t spend enough time in a car to justify paying any more than its worth or a higher interest rate because we got in a hurry or allowed a salesperson to bully us into signing something. Just be honest – if they don’t respect your wishes to wait and think about it, that’s a sign. Move on. Remember, the longer a car is on the lot, the cheaper you can get it. Take advantage of that. If you are car-shopping early and without haste, you will have time to make really good deals on a vehicle you know has been there too long.
7.) Determine your bottom line.
It’s very fair for you to get the best deal possible. It’s not fair of you to waste a salesperson’s time if you have no intention of buying a car. Once you know your budget, and you know what the vehicle you’re interested in is worth, and you know what you have in buying power between trade-in and cash – you need to have a magic number in mind. By the time you’ve test-driven something a couple times and you know it checks all the boxes as far as your requirements go, you have to find that sweet spot where you know you’d be getting a good deal. This is where using the same dealer more than once can be helpful. If you have a good relationship with a salesperson, and he or she has sold you a vehicle before, they know you – and they know what you’re capable of and how much you know. So if you know your bottom line, you can but a lot of the crap out of the car-buying process. They either hit your number or they don’t, and if they don’t, then move on. Remember, whatever you buy will just be…”blah”…in six months, so don’t let the moment and the excitement override your discipline.
Reading this, knowing this, and committing as much to memory as possible will make car-buying way easier for you. Please share, subscribe, like, and share with your people. This is something we all need to know – education is the great equalizer after all. I hope you found this helpful.
My wife and I rarely fight about anything, but when we don’t see eye to eye, it’s usually about time.
We serve as a good example of what polar opposite perceptions of time might be.
While money, religion, and politics often make for disastrous dinner conversations, we can all (when we choose) exercise courtesy and respect to help keep the discourse from becoming combat. Perhaps that’s because we all visibly and openly represent different views, which leads us all to expect disagreement.
What’s not as obvious is that we also tend to perceive time in different ways. This difference can actually be the catalyst for some seriously different attitudes, characteristics, and beliefs regarding time.
Allow me to explain. My wife is a photographer. She’s patient, kind, compassionate, and artistic. Her qualities suit her profession well. On the contrary, I’m a transportation manager on the civilian side, and a non-commissioned officer on the military side. I’m impatient, demanding, and organized. We aren’t polar opposites. I have some musical ambition to compliment my wife’s artistic talent, and she detail-oriented and thorough, which compliments my “clean-freak” nature. We love and respect each other, and I certainly think we have a great relationship.
Hey, at the root of all this, our biggest divide lies between our perception and management of time.
I am the guy who says if you aren’t 15 minutes early, you’re late. My wife has been known to say things like, “we can get there around 7:00am, give or take.”
If I have to be to work at 7:00am, I calculate the total travel time, pad that time in case of an unplanned delay, and typically arrive early. My wife, who knows it takes me 30 minutes to get to work, will ask my why I’m leaving so early if I say I’m leaving before 6:30…get the picture?
It begs the chicken and egg question. Is it our other qualities that dictate how we perceive time? Or is it the other way around?
My wife, who is also a mother, multi tasks just as much as I do. She works from home, takes care of our children, coordinates doctor appointments, assists with meals, cleans house, and so much more. She accomplishes her missions – but it’s hard for me to watch. If I can’t decipher the method to her madness, in my head, she’s doing it incorrectly. Likewise, if I worked from home with her, my obsessive compulsive nature around using a planner, doing things in order, sticking to a schedule, and holding others accountable to their schedules would stress her out significantly.
I treat time like a limited resource; my wife is more peaceful and better at “living in the moment.”
We’ve confronted this on multiple occasions. The topic of time is the bedrock of most conversations that strengthened our relationship over time. We don’t agree most of the time, but we understand where each of us is coming from, or rather, what motivates us and our perceptions.
This isn’t exclusive to relationships. I work full-time, serve in the Army National Guard, and use every spare minute of the typical work-week trying to side-hustle. I see free time as lost income if it’s not spent working. We recently had the opportunity to go to St. Thomas on vacation. For the first time in a very long time, I embraced doing absolutely nothing. I loved it. If it weren’t for my wife, I’m not sure I’d be able to do this. Time can’t always be money, or ABOUT money.
The point is that many others who have disagreements about money might be either failing to use that unstructured time to make more money, or failing to take the time to talk about money. You might hear statements like, “there’s no time for that” or “you spend all your time at work” and so many more…but like I said in the beginning – time, or the perception thereof, might be at the root of the problem.
So, if you’re like me, and believe every day has 24 hours and it’s that simple…just budget those hours appropriately – remember to have patience for people like my wife, who instead say there’s not enough time.
There is common ground, and maybe if I stopped to smell the roses more often, I could be as good of a parent as my wife is. She probably doesn’t believe it, but I look up to her. We just have to lean on each other to meet in the middle and have the best of both worlds.