Financial Planning for Joe - Part III
Let me begin by telling a couple dumb Pvt. Squirrel stories. Okay, so Pvt. Squirrel left his tree nest when he was seventeen and had a girlfriend. I was an E-2 by the time I made it to my first duty station and made the princely sum of $752.70 a month. After taxes and deducting money for the Army College Fund ($100), I really wasn’t making all that much. Looking back at my finances now, the lion’s share of my income went to… you guessed it, long-distance phone bills.
Man, was I lonesome! I called friends, I called family, I called my girl. I had a Visa card with a $300 limit and I used that to fly home for block leave. I opened a credit account with AAFES and used it to buy all sorts of stuff. Basically, I spent absolutely everything that I made, and then some, for the first three years of my career. I was more concerned with making myself feel better (gratification) in the short-term, than thinking ahead at all. Think ahead? That never really occurred to me. I even bought an old clunker car for $100 and prayed each outing that it wouldn’t break down. Truly, that is no way to live.
Something changed and I decided that I was going to change my ways. I decided that I would save $50 a month and also buy a new car. I bought a new Ford Ranger (a plain-jane edition I paid off in three years) for around $9K and still drive it today! I didn’t put much thought into how much $50 was going to build, but it wasn’t painful.
You know my story Joe. You’re probably living it. The significant difference now is that a deployment and/or re-enlistment can get you a nice chunk of money. Did you blow it all? So the first real thing that you have to consider Joe, is to identify where your money is being spent. Do you know how much you spend on a Saturday? Could you stay in one Saturday every month and watch movies or play poker instead of going out?
Joe, your assignment for the week is to figure out where all your money goes. What are your bills? How many times do you draw money from an ATM? Do you have credit cards? What are the interest rates? Do you use your credit cards cause you’re always out of cash? Did you hear somewhere that having a credit card balance builds credit (untrue, btw)? Think about it Joe, make a crude Excel spreadsheet or write it out on paper. Figure out what your debt load is and what you spend in a month. Alright, go call your girl… or maybe you could IM???