Thursday, April 7, 2011

The 1st and the 15th

There are tons of unknowns in the military. You might think you're joining the Guard to do Civil Affairs, but get shunted off to Staff Work. The Staff Work might be really interesting at times, but your role may chafe at you. It might even think about making you transfer to the Reserves to an actual Civil Affairs Unit. The mission might change, and then change back again, all before you even left your home state.

You might think you're bound for the safest place in the country, but then read about coordinated suicide attacks on the post. The bottom line to all this is that you just don't know.

One of the few certainties, however, is that on the 1st and 15th of every month, you're going to get a direct deposit sent your way by Uncle Sam. That's important, because with automatic bill payments these days, a big chunk of that might be needed for the real humdingers like the mortgage, the insurance, and the utilities. And one of the few upsides to a deployment -- for the soldier and for his/her dependents -- is that the incentive pays make that twice-monthly check just a bit sweeter. It's really one of the few saving graces, and it's even the reason that many unemployed or semi-employed Guardsmen and Reservists jump on deployment after deployment.

So when we heard today that the whole "1st and 15th" thing might get interrupted, people were pretty much shocked. I have no idea whether it'll really happen, or whether this is all some kind of media/political stunt. My days are too jam-packed to follow politics, so I won't even attempt to go there. On a way more practical, personal level, I'm glad for one thing -- even though I have a good chunk of consumer debt to pay off, I didn't liquidate my *rainy day* fund to do it. Some financial advisors and writers start all their screeds with, "Pay the cards off first."

I think that's bad advice.

The FIRST thing anyone should do, if possible, is build a six-month cushion that could soften the blow posed by a sudden layoff, illness, or "black swan" scenario like a natural disaster or government shutdown. THEN worry about the cards. If the government shutdown really happens, I really may miss some paychecks. But the good news is that all the money will come back to me down the road. I'm not really sweating that part. More important, I'm not sweating the impact this could have on the two souls back home who depend on me to provide for them. The piggy bank is there, and the hammer is at the ready.


kad barma said...

My approach was "cards first", but only because I had a home equity line of credit to serve as my "rainy day fund". The credit card debt was at a higher percentage than the loan would be, so even if a worst-case scenario occurred, I'd still have been ahead. And, once the cards were gone, I had more income coming in every month to pay ahead on the mortgage, and increase the basis for my line of credit. Win-win.

The real lesson, of course, is not to borrow money if you can at all help it, and, even then, to think twice before you do. (Yes, a mortgage might make sense because it's tax deductible and saving you from paying rent, but that's why you think twice, right?)

As for the government shutdown, the fact that they're arguing about a few billion beneath a swamp of trillions, and caring nothing for the profound effect a shutdown would have on service people and other private citizens on a public payroll, proves yet again that party politicians have nobody's interest in mind but their own party's. Shameful.

C R Krieger said...

I thought the answer was three months.  In fact, this exact same discussion came up in a different venue (about the First Sergeant talking to the troops every payday about saving some—back in the days before automatic deposits, which DoD now pushes, since it saves millions each year).

While I agree with Kad re getting the job done, I am not sure how to do that.  Thus, my most recent blog post.  Should the House of Reps just give in to the Senate over those few billion?  Should the Senate just give in to the House?  And, most important, what is the way out of the swamp in the future (FY2012)?

Color me befuddled at this point.

Regards  —  Cliff

Sandy said...

Hi New Englander,

I didn't see a contact email so I'm commenting and hoping you get this. Are you anywhere close to 123 Market St in Lowell? Can you post a picture on your blog? I'm not sure this address still exists. I found out my great great great etc etc grandfather was a Civil War Vet, MA 30th Infantry and he lived at that address. I live in New Jersey, sort of far to check it out, so if you are out and about one day, I would love to see - not avail on google maps...

Thanks in advance!