Tag: standard of living

Why I drive a Prius and Other Begrudgingly Smart Financial Choices

I haven’t had a car payment for almost five years and it has been awesome…except for the fact that my 2006 Honda CRV was getting a bit boorish to drive and I really wasn’t a fan of the armrest.  Those are pretty silly reasons to buy a new car, and every time I went car shopping, I came back to the same realization that I loved money more than I loved a new car.  Then in mid-August a teenager not paying attention slammed into the back of my CRV as I was waiting on someone making a left turn.  The car didn’t really have much damage, but the bill for repair was approaching the value of the car and it was declared totaled and I got an $8,000 check.

 

I like to take my time making big financial choices, so I was a bit disappointed that I had less than a week to decide on a car.  I had three options as I saw it:

  1. Buy a similar vehicle to the one I had and stay on the savings plan to purchase a newer car in the next few years
  2. Spring a few extra thousand dollars and get a slightly nicer used car
  3. Put the $8,000 towards a new car and take on a car payment

After spending a weekend with every used car salesman in a 20 mile radius, I ended up settling on option #1 and purchased a Prius with similar mileage and a similar year to the car I was already driving, except now I have more than doubled my gas mileage and will probably only fill up the tank once a month (I’ve spent $14 on gas since mid September).

So now my household has a Prius and a Minivan.  I’ve thought about putting a Ranger bumper sticker on my Prius, then supplementing that with a “my other car is a minivan” sticker, because that’s just the kind of guy I am.

Look, it’s not sexy, and not a “fun” car to drive, but it’s comfortable and it gets me to work every day.  It’s a reliable vehicle and it protects me financially, and as I have told you in the past, strong finances also protect your marriage.  So by making this choice, some of you “manly-men” might make fun of me, but the most important relationship in my life is protected, so insult away bitches.

Other Frustratingly Smart Choices

I recently took a promotion within my company, moved my family back to North Carolina, and drove 45 minutes one way for nearly a year because I had a rental property that I couldn’t sell.  I know many of you have gone through this same pain in the ass problem.  We moved my big ass five person family into a small 3 bedroom 1600 square foot house for months because it was the smart financial choice.  When we finally sold it, we upgraded some, but stayed well below 20% of my salary in the new home and cut my drive to 20 minutes.  We could have afforded much more house, but we both know this isn’t our final living place, and our ability to save money is more important.  It also gives us greater financial flexibility.

I only learned these lessons because I made the mistakes before.  Less than a decade ago I was living in a house far more expensive than I needed to be and I had a $500 a month car payment.  We lived almost paycheck to paycheck, and whenever I got an overtime check, we would spend that too.  It wasn’t until I had to take a pay cut that all our bad habits cost us.  We argued, she cried, the stress was terrible, and I had to get rid of my beautiful truck and buy the minivan then drive the CRV.

We made, and still make, sacrifices financially, but we don’t have any debt.  We stay on a strict budget that fits our needs that includes entertainment, and going out, and new clothes for everyone regularly.  We take vacations, and now we never feel like we don’t have money, and folks let me tell you that feeling is so much greater than the new car smell or a great big house you don’t know how you’re going to pay for.  Those things aren’t going to bring you joy like being able to buy your kids the present they’ve been wanting without batting an eye. We’ve also become much more generous givers able to donate significantly to charity.

Being debt free means to have complete ownership of all the money you earn, and sadly very few people have EVER felt that.

Imagine not owing anyone.  Imagine not having to pay credit cards, student loans, car loans, etc.  Imagine getting a check and not being a slave to anyone else.  I strongly recommend Dave Ramsey’s Financial Peace University, you can scroll down and find a class near you.  In Proverbs it says “the borrower is slave to the lender”, becoming debt free is releasing your own shackles.

Having debt is like a constant weight that you have to carry around hanging off every single paycheck.  No matter how hard you work, or what promotion you take, it never feels like enough.  We live in a culture that thrives on materialism where status is given by your belongings…but it’s all fake.  Some things are worth more than a fancy car or a really big house, and being financially secure is one of them.

Set yourself free!

-LJF

 

 

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Important Marriage Conversations during Transition

I have told you before that you have to treat your marriage like a team event, not a contract.  If you win an argument against your wife, your marriage loses, and ipso facto, you lose too.  The only way to win is to work as a team and win together.  Today I want to focus a bit on the important conversations you need to have and how to have them.

Answering the 4 big questions together

How anyone of you does this without your partner is absolutely beyond me, but it happens all the time because answering these questions means you might have to have some tough conversations.  You need to start having these conversations at least one year before you get out, so you have time to prepare and adjust as needed.

Big Question #1- Are you financially ready to get out?

If one of you is a big spender, or maybe you have student loans, credit card debt, car payments, etc. you need to get together and figure out a budget that allows you to clear out as much of that debt as possible. Right now you have no idea how much money you will be making next year, or to put it more bluntly: you have no idea what someone will be willing to pay you next year.  If you decide to get out of the military and carry with you a ton of debt, you’re setting yourself up for failure.

I know what I am suggesting here is a tough pill to swallow because it implies you might need to stay in longer.  Then again, if you have a very compelling answer to Big Question #2 and can’t wait any longer, then you and your partner need to be perfectly aligned with every dollar you decide to spend (down to whether you’re buying lunch).

Big Question #2- Do you know Why you’re getting out?

Although couples often talk about the reasons for leaving the military, sometimes they aren’t aligned.  I’ve seen where one person was ready to get out and the other wasn’t, but capitulated to satisfy their partner.  If you’re getting out, you need to have a better reason than “my wife hates the military.”   Sorry to drop that one on you, but if you’re not all in also, when life gets hard on the outside, you’re going to blame her for it.  That blame will lead to resentment and eventually the relationship is going to suffer anyway.  You both need to be ok with the decision!  See if there’s a compromise: is there a PCS location that would help, or maybe you decide on a number of years.  Regardless, it needs to work for both of you, and if you’re not OK with it, you need to speak up.

Big Question #3- Do you know where you want to live?

I had a buddy that followed his wife to her hometown because she wanted to be near family.  Because he was so geographically limited, it was hard to find a job.  This put them in financial strain which resulted in constant arguments in the house.  In the end they ended up with an ugly divorce and their kids are stuck in the middle.  It’s a terrible situation for everyone.  A recommendation from a corporate recruiter is to have “gates” set up:  At 12 months you want a job in San Antonio (for example), 9 months out you open it up to Texas, 6 months out you open it up to the southwest, 3 months out something stateside.  If you both agree to this strategy ahead of time, then she will know you’re doing your best to meet her needs, but also keeping a pragmatic approach and protecting your finances.

Big Question #4- Do you know what you want to do?

You and your wife should be very clear about the parameters of your work so there is no confusion when you get a job offer.  If you want to be a cop, or work an off-shift, she needs to be clear on the requirements of that job. If you want to work as a contractor and deploy some more, she should be on the same page as you.  If she expects you to take a 9 to 5 and help her with the kids in the morning, you better be willing to do it.  Regardless, it’s a conversation you need to have.

Financial Decisions

I will always harp on financial decisions because finances are the number one reason for arguments within a marriage.  Regular arguments over finances can eventually lead to resentment and other arguments over minor stuff.  This can then result in a marriage beyond repair and a family gets broken.  Losing a family then puts a veteran into extremely high risk category for suicide, particularly when coupled with substance abuse and depression (very common after divorce).  So you see, answering question #1 and being on the same page with your wife financially could very well be a life or death decision.  Just don’t take this shit lightly ok?

Respect your partner and their ideas of what you should be doing with your money.  Don’t make any decisions without consulting her first.  When you talk to your wife about a financial decision, don’t say, “this is what we’re doing,” because that doesn’t count as a conversation.  You guys are a team and you don’t need to be giving orders.  Instead try, “I’m thinking of doing X, does that align with your financial goals too?”  If you decide to work at your marriage and treat it like a covenant and not a contract, you will find it to be so rewarding!

Remember that this is your partner and teammate that you are talking to.  If you hurt your wife in order to win an argument, your marriage loses.  Keep your words soft and sweet because you never know when you’re going to have to eat them.

Good luck and God Bless!

-LJF

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Veteran Profile: Ed Jasper

In this first installment of Veteran Profiles, listen to Ed talk about his 20 years with the Army and more than 14 years with John Deere.

Ed Jasper
Military Experience

United States Army – 1981 – 2001 – (MOS 67N/67T/67Z)

In the early years, I was a UH-1H (Huey) Crew Chief, Section Sergeant, Instructor, and Quality Control NCOIC. In the later years, I was a Production Control NCOIC, Squadron S3 NCOIC, and Retired as a 1SG of a UH-60 (Blackhawk) Troop

Current Position and Civilian Work Experience

Manager of Program Management Office, John Deere – Cary, NC

I have worked for John Deere for 14.5 year and had multiple assignments in Factory Operations, Project Management, Quality Engineering, and Program Management

 

The Big 4 Questions:

  1. Were you financially ready to get out? What steps did you take?

No, I was not financially ready to get out!

I was a 1SG with 3 kids in High School, and one kid was getting ready to start college. I was fortunate that I found a good job with a great company and literally left the Army on Thursday, drove across country and started with John Deere on Monday.

I tried to be as debt free as possible, ensured my credit report was clean and accurate, and bought a house that was below what we were approved for to help control expenses.

Stetson 4-3 ACR

  1. Why did you want to get out?

I loved the Army, but it was time.

I loved working with soldiers and spent my entire career in Army Aviation and was still crewing helicopters occasionally as a 1SG. It may sound funny, but I was not interested in becoming a CSM and what that rank would entail at that point in my career. I had been a 1SG for 3 years, and the family was ready to have me home more. In 2001, to become a CSM, I would have had to go to the academy, spend a year at Ft. Bliss, and then be subject to an assignment worldwide. I had three kids in high school, and that level of uncertainty did not seem like the right thing to drag them through. Based on what I thought my next step in the Army was, and the needs of my family, it was time to go.

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  1. Did you know where you wanted to live?

I have a funny story about where “we wanted to live”. We had lived all over the world, and our last duty station we were stationed at Ft. Carson, CO which is an awesome assignment. My wife and I were discussing the whole retirement plan, when a commercial for Colonial Williamsburg came on the TV. We had lived in the area previously for a few years when I was stationed at Ft. Eustis. We both thought going back to the Tidewater Area of Virginia would be a good choice if we did not stay in Colorado. The following day, I got a call from a previous commander of mine that said he had someone from John Deere where he was working in Williamsburg, VA that wanted to talk to me about a job! How is that for karma!

Honestly, I was willing to relocate to any location for the right job. I had seen a number of former coworkers in Army make what I thought was a mistake and limit themselves to a geographic region. This really limited the types of jobs they were getting interviews for.

I know moving is tough on families, but after John Deere made me job offer,  it was my kids that told me it was ok to change High Schools again, they would adjust and that Mom and I had to do what was right for our long term future. It was tough on them, but they have all made it through college and are working in their chosen career field.

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  1. Did you know what you wanted to do?

No, I had no idea what I really wanted to do. I did have plan, I called it the “5 finger plan” and had a resume that matched each of those paths. They ran the gamut from working for a defense contractor in aviation maintenance to working in public education. The other thing I did when I was in was to finish my degree programs – so I earned an Associate’s Degree while I was still a SPC, earned my  Bachelor’s Degree by the time I was a SFC, and finished a Masters in Education the year before I retired. The degrees did not make me any smarter, but they do open doors that might not be available without them.

I knew I wanted to have a challenging job, with a firm I could grow with, and that would offer a level of pay that would improve my standard of living. So far, John Deere continues to offer me new opportunities – I have moved 6 times in 14 years and had 7 primary jobs in that time period and number of other special projects. Not everyone has to move to advance, but they have offered interesting jobs that I wanted to pursue, so it has been a good fit so far.

 

Quick Tips for Transitioning

  • If you are enlisted – get as much school as you can to include college, certifications and other training applicable to your career path.
  • Officer, Senior NCO, or Enlisted – Be willing to take an entry level job with the right company – your experience and work ethic will lead to other opportunities for promotion.
  • Be willing to relocate to take the right job – go where the work is
  • Contact others you have served with that are already out – they are a great resource
  • Practice Interviewing and using words and language that civilians understand
  • Send your resume to people not in the military to get some feedback – Don’t be offended with the feedback
  • When you get the first job, find a mentor. Most organizations have some former military in the workforce. Find out who they are, and approach them about mentoring you. They will be invaluable to you in helping to connect the dots as you transition.

 

Listen to the full interview now, or take it with you and listen on the go!

I want it on the go: Veteran_Profile_Jasper

Listen now:

 


The 4 Big Questions-Finances

  1. Are your finances in order?

Before you get out, make sure you have zeroed out major debts.  I really recommend paying off cars and having as few monthly payments as possible.  Take a look at what your monthly expenditures are and make a budget.  This will let you know exactly what you need to survive.  If that number is equivalent to what you are making in the military (including BAH), then you’re spending too much.  Chances are, your first job is going to be equivalent to your base pay, if you’re lucky, but probably not higher.  So you’re going to have to learn to survive on just your base pay.  You are going to be entering a world where salaries are negotiable, and employers are going to offer you the least they think you will accept, so you need to know exactly how much you need.  You and your family are used to living at a certain standard, you’re going to start off below that standard, and you need to know exactly what your floor is.

Also, there are taxes to consider.  If you’re like me, I kept my Florida registration so I didn’t have to pay state income tax.  Once I got out, that all changed and it was a kick in the nuts to have that extra expense.  You’re going to have to pay for health care now as well and that’s not cheap.  There are a lot of unexpected financial hits that you’re going to take, and it’s best that you’re set up to take those punches.  If you’re not ready now, take a few months, maybe extend out your ETS date if you can so you can get it together.

Here is an example of what happens with my paycheck.  Take a look at the deductions and taxes!

paycheck

This is something I certainly wasn’t prepared for.  About 40% of my paycheck is gone before I even see it.  Some of that goes to pay for my healthcare, some goes into a 401k for retirement, some goes into a dental policy, and some goes into a Health Savings Account or HSA.  So if your target salary is $72,000 a year, make sure you’re not planning for having $6,000 a month in your bank account, you’re probably only going to bring home about $48,000 of that.

For most of you while you’re in, your base pay is pretty much equivalent to what ends up in your bank account.  If you’re deployed you’re not paying taxes, and if you’re stateside, you have COLA, BAH, and BAS.  Once you get out, everything is coming out of that base pay, plus health care costs, plus you’re paying for your retirement somehow.  I didn’t realize this and accepted a lower base salary than I would have if I realized I was going to lose 40% off the top.

If you’re thinking of getting out, go make a budget right now.  You can’t even start to look at jobs and salaries until you’ve figured this out.

 

 

-LJF