Originally Posted by burnt_tiger
For an emergency fund, its recommended you have 3-6 months living expenses in cash, not a mutual fund. A money market fund is generally acceptable but with rates near zero, its a non option currently.
What i do is ladder CDs to maximize yield while maintaining liquidity. For example if you could eventually swing 3-$1000 dollar CDs (i realize that may be a longer term goal- but the idea is to always be looking for ways to make your money work harder for you), You would earn .30% interest vs .10% interest on the same $3000 in a regular savings account. "laddering" means buy one 3 month CD the first month then another the next month and then another the 3rd month. That way you maximize yield while still maintaining penalty free access to 1/3 of your funds in any given month.
If you need to pull it all out penalties will never exceed the accrued interest on the CD, in other words you might lose whatever interest you earned in the current period but youll always have your initial 3000 plus whatever interest you earned for previous periods.
-rates are based on USAA rates as of 6April13
-feel free to PM me if you want to know more
-Knowledge is power brother, congrats on getting squared away so soon. I did the same as you and trust me it pays off, big-time. Keep it up
- I will also echo what others have said about debt, Roths and TSP.
Alright, so a couple short term goals for me as of today:
-Call USAA and:
1.Set up a small credit card(<300$ if possible to establish a small level of credit)
2.Set up the percentage 10% of the money i get from the military to go directly to my already existant savings account.
3. Discuss possible investment options and a small percentage to go toward it(if i figure out which one is good for me.)
4.Discuss Life insurance and a percentage of income for that.
5.Figure out how many savings accounts i need. (already have 2)
Originally Posted by burnt_tiger
Also look into taking a personal finance course at school. Most campuses offer them and it will count as an elective if you are not a business major.
In the spring of 2014,i'll do that, my schedule will be much lighter then.
Originally Posted by MountainEarth
Live well beneath your means so when ... not if ... when emergencies arise, you can weather the storm without breaking the bank, and stressing yourself out. As someone else said, it's worth it to live simply. It really is more enjoyable. Yeah all the toys are great. But toys also break. And that means more money which means more working. I may have less than others my age ... but I have a LOT more time to enjoy what I have. And that I wouldn't trade for the world.
Remember this: You can always make more money. But you can't make more time.
This stuck out the most to me. What does it really mean to live simply? I've never had to do that, just pay this huge up front fee and just eat whenever, sleep whenever, no bills, it's really weird trying to juggle all of it now and my future investments and stuff at the age im at but im willing to work towards making it work.
Originally Posted by Xer0 SiN
try to see if you can enroll in tsp (thrift savings plan). not too sure if youll be able to do it if youre in the guard though. best investment i had while i was in.
I'll be able to do so, the guard is a branch of the military as well as the other big ones.
Originally Posted by Devious6
I think there are three components to setting yourself up for long term financial health - and this is the time to do it. Very few people do this - be one of the few and you will be happy you did in 20 or 30 years.
3. Life insurance
You've already talked about setting up a savings plan - that's your short term "emergency fund." Use it sparingly when you absolutely need to. Be careful, though. Because it is easily accessible with no "penalty" it can be an attractive target for those purchasing urges.
Start investing in some type of long-term retirement plan. USAA is a great place to ask someone to help you find what will work for you. Start putting something into the plan now - even just $50 a month. Have it taken out automatically - and every time you get a payraise, a bonus, etc, kick up the investment a bit. Try to stretch yourself a bit here - you'll be surprised how you can do it after a few months of getting used to it. Don't touch this fund unless you have a huge need. You can never gain lost compounded interest. And, remember that as the market goes up and down, it's only a loss or gain if you need the cash that day. The historical trend since the beginning is up - certainly there are down periods but it always goes back up.
Many people forget about life insurance. When you are young you don't think you need it - but it is also the cheapest time to buy. And, once you do, you set yourself up for options to increase it without health care screens. As you get older, you will have health care crises - get started on the insurance now. Again, get an advisor to help - from USAA, etc. The long term goal is to have a base of whole life insurance and some decreasing term that is offset by the increase in your investments.
I didn't start thinking about this stuff until I was a young captain - and even then I missed some great opportunities to set us up for financial health.
Now i follow pretty much everything you've said here, now about life insurance, thats something that USAA can set me up with right? I heard it was really cheap to get life insurance through them but i could have been mistaken or heard that wrong.