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Greetings,
I joined the Navy just over 2 years ago with a plan. That plan was to enlist for one contract, for the experience, the ports, and last but not least, to save as much money as possible.
Early on, I was only aware of basic pay and a few of the special pays. Slowly I learned about various other types of pay, such as COLA and SDIP. I'm intrigued, as COLA and SDIP combined could amount to more than my entire month's pay as an E-1 just 2 years ago.
So, my question to you, is how do I best maximize my money earned while I'm in? I am willing to live in sub-par conditions, and forgo comforts now for a better future. Currently, I am a PO2 of 2 years, with 4 years remaining, and I am willing to extend for a total of 8 if the benefit is great enough.
I joined the Navy just over 2 years ago with a plan. That plan was to enlist for one contract, for the experience, the ports, and last but not least, to save as much money as possible.
Early on, I was only aware of basic pay and a few of the special pays. Slowly I learned about various other types of pay, such as COLA and SDIP. I'm intrigued, as COLA and SDIP combined could amount to more than my entire month's pay as an E-1 just 2 years ago.
So, my question to you, is how do I best maximize my money earned while I'm in? I am willing to live in sub-par conditions, and forgo comforts now for a better future. Currently, I am a PO2 of 2 years, with 4 years remaining, and I am willing to extend for a total of 8 if the benefit is great enough.
Navy
Money
Edited >1 y ago
Posted >1 y ago
Responses: 4
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Invest it. Thrift Savings Plan (TSP) is a great option and you are able to continue it even after you leave the service. The best thing to do is do some research and talk to your department/divisional financial specialist and see what they suggest or help educate you. I'm a firm believer in investing in TSP however take into account big picture 30+ years down the road not short term or the payoff won't be that great.
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Where to start? There are a ton of ways to save money. TSP is long term and I would recommend putting 10-15 % of your net pay into this a month. Next would be a shared savings acct. from Navy Federal (NF). You want to have 6 months pay saved up at any time for emergencies. What if you get injured and medically discharged or discharged for another reason. 6 months pay will hold you until getting another job. I would put 25% of your net pay into an allotment for this savings. Once you have a comfortable amount saved look into CD's. NF has some of the best rates short term is 3 months @.45%, 2 yrs @1.25%, 7yrs @2.15% all of these are $1k minimum. NF also has a special CD called easy start which is 1 year@ 3%. This is a great deal. You cannot pull these out until the time is up to receive the interest. With E5 pay plus BAH it is possible to do what is called "Laddering" where you create one of these once a month. This should be done with caution because you need to have $1000 extra dollars a month not in use. However CD's are very secure and do NOT lose money. Ever. They are fixed APR with NF. Next you will want a way to track your money. An app I use is called Personal Capital. It allows you to link all of your bank accounts, savings, credit cards, loans all in one easy to use app. You can also track your spending every month to see what you spend too much on. Other things... The Navy holds free financial seminars like Million dollar sailor. These provide lots of insight on how to be just that. A million dollar sailor. Do your own research and do what is comfortable to you. I also read and watch Dave Ramsey's books and seminars again lots of insight and info. If you have any questions just let me know best of luck!
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