Outlaw FinanceEverything You Never Learned In School

As a Marine leader I am in a very unique situation than most people that will read this blog.  I am responsible for ensuring that the Marines under my charge are not only tactically and technically proficient, but are also responsible adults and good citizens.

The majority of the Marines that work for me are under the age of 21 and are getting a steady paycheck for the frst time in their lives.  Up until the time that they joined that Corps most of these guys have been living at home with mom & dad and have not had to worry about their finances.

The first thing that I do when a new Marine checks into the unit is sit down with them and talk to them about what I expect from them.  I let them know that I am not a financial advisor and what I tell them are just recommendations and suggestions.

First I advise them to live within their means and budget.  I let the know that credit cards are not bad but to make sure that they are not living on them.  I tell them my story of how I got myself into a financial hole and how I am digging out of it.  I explain to them how i am spend over $500 a month on payments to get me out of this hole.  I let them know that of that 500 bucks more than half of that is going to absolutely nothing in the form of interest.

My next piece of advice is to be careful when buying a car.  Unfortunately there are dealerships and used car lots around military installations that provide easy credit on subpar cars and take care of young inexperienced service members.  My advice for this is to go to a reputable dealer and to secure financing through their financial institution prior to setting foot on a car lot.

My third piece of advice for these guys is to start an emergency fund.  Even with a steady paycheck for another 3-4 years I explain to them the importance of having a safety net for not only when they get out, but also to have some money set aside in case of a true emergency (car problems or emergency flight home).

Last but not least I explain the Thrift Savings Program (TSP) to them.  The TSP is the Government form of a 401k.  While there is no matching contribution for active duty military members I explain to them that importance of saving for retirement now vice later due to the powers of compound interest.

I hope that by doing this my Marines won’t make the same mistakes that I did.  I know all the guys wont listen to what I have to say but I hope that I can keep some from going down the path that I did.  Hopefully the lessons that I try and teach them now last them for the rest or their lives and they can be financially reponsible individuals.

I joined the Marine Corps more than 13 years ago and right out of high school. I have had steady paychecks on the 1st and 15th ever since. While I have never struggled for money I have never been financially secure either.

While my paychecks were always steady and could always be counted on they were almost always gone by the time the next one came around. I was living paycheck to paycheck and to make matters worse I was also racking up some serious debt on my credit cards.

I was fine with the way I was living my life up until about 2 years ago. I realized that I had been wasting tons of money and that I needed a plan to get out of debt. I have been working on that plan ever since.  At that time I had approximately $50,000 in debt.  Unfortunately I do not know the exact number as I was afraid to actually face it.

In the middle of 2007 I received a re-enlistment bonus for agreeing to another 4 years of service in the Marine Corps.  Of the $28,500 I received $17,100 dollars after taxes and TSP investment.  Although I should have paid more on my debts I did get myself into a more manageable situation.

As of Jan 1st I am left with three outstanding accounts.  1st is my car payment on my 2006 mazda 6 on which I pay $450 a month.  This is slightly more than the payment but it is just easier to budget this way.  The next is my consolidation loan which I owe $13,500 and am paying at the rate of $450 dollars a month as of right now (hoping to raise this amount soon).  This is a student loan that I have from back in 2002 when I went to school for my Microsoft certification.  That loan is just over 3,000 and is paid at a rate of 69 dollars a month.

The focus of effort for me is to get the consolidation loan paid down as quickly as possible for it has the highest interest rate as well as the most impact on my credit score.  As money become available I will add that to the payments I make on that debt.

I hope that I am able to share with you advice and stories so that you do not get yourself stuck like I did myself.