Pima
10-Year Member
- Joined
- Nov 28, 2007
- Messages
- 13,900
My DS did NOT take the full 25K. He took 10K, 5K checking and 5K ROTH IRA. He purchased a new car using the dealers 0% int loan. Nothing snazzy a Toyota Corolla.
My point is think about everything before you sign the paperwork. 25K at 2.99 sounds great, but not so much if you are using it to buy a car that you could get a loan at 0%. It is great to take it to invest in a ROTH because long term over the 5 yrs the stock market is going to return at a much higher rate than the 2.99 interest you are paying.
It is important to really really remember that unlike the SA grads your 1st paycheck may take time to catch up to what you need to outlay when you move to your 1st duty station and at the same time that 6 month grace period may be up and the 1st payment may be due.
Just my opinion and with 2.07 cents you can get a small coffee, but I would never suggest to anyone to use all of the loan for a student loan repayment unless you have 5K in the bank for that move.
~ DS basically outlaid 5K for his 1st PCS before his pay caught up. Traveling across country for 4 days costs money. The per diem will not be paid back until you report, so ask yourself where is that money going to come from? Once at that base, staying in the Qs, at least for AF has to be paid for every 10 days, where is that money coming from? Checking or credit cards at now a higher rate than the 2.99? How much can you raid from the folks home and fit in your car to take to your 1st duty station...pots, pans, dishes, sheets, towels,tv, etc.? Even living in the BOQs you need to supply those, if there is no BOQ option than are you going to raid your mattress and furniture from your bedroom, how about the family room sofa? Just saying you will need a bed before that paycheck catches up. Have you ever done a true 1st grocery shop? You'd be amazed how it can cost a single person $300 at the Commissary will only cover the mins....toilet paper, aluminum foil, dish detergent, laundry detergent, hand soap, shampoo, body wash, ziplock storage bags/containers, milk, bread, PB, salad dressing, mayo, tuna fish, mac & cheese, butter, eggs, cheese, salt, pepper, etc are more expensive than most college grads realize and I am not even hitting the expensive crap like meat, cereal, fruits/veggies or a 12 pack of soda/water/gatorade.
Just saying my DS about died when reality hit him for setting up his BOQ, he did not have to purchase furniture, or a tv. He did have to pay for cable. He did have to buy dishes, linens, etc. He spent about $800 the 1st few days. Again out of pocket because as a ROTC grad your pay will be delayed for @2 weeks after reporting. Report on the 28th, well you missed the 1st of the month paydate and now you are waiting until the 15th. Report on the 5th, you make it for the 15th, but you still have 10 days to survive without pay, and your USAA starter loan payment is due on the 7th.
~ I still laugh at him saying Mom do you know how much a small container of paprika cost? Me: Are we doing the Price is Right? @2.49 cents! Think about it...you will be cooking on your own. Salt, pepper, flour, sugar, oil, oregano, are going to be on that 1st shop and from a Price is Right perspective you are not going to walk out even as a single person with less than 300 on your 1st shop unless you of course want to eat Ramen!
~~ DH was ADAF for 21 yrs. 11 moves. When I could I would hand carry (DITY) all of my dry goods, and still it would cost me several hundred just to replace the staples that I could not DITY.
Take the loan, but be smart. Think long term about how you spend it. If you take it and spend every penny to pay down a student loan or buy a car ask yourself where will you get the money to pay for the move? How long is that lag time before reporting? Can you get a job to save up enough money to live for a month with maybe only 1 paycheck while you are now being hit with the USAA loan, and the credit card bill due for you moving to your 1st duty station? Will you need a new car, and how will you pay for that if your pay is delayed?
Finally, because DS was financially frugal, and thought about long term before signing the paperwork, he was able to live without worrying while his pay caught up. If he wanted to go to Popeye's for lunch 5 days a week, he could because he put 5K from that loan into his checking account instead of on his credit card at a higher rate. His friends did not have that option because they used the entire sum for student loans or a new car. He came home for Xmas that year and could pay for the ticket on his debit card, no interest. His friends had to buy their tickets on credit, not because they wanted the points or airline mileage, but because they used it all on the student loan or car and had no safety net.
JMPO, but I think too many people do not realize why it is called a CAREER starter loan. It is to start your career, and they know that when you move it will be VERY expensive. They expect that you will probably rent, and most residences (apts or homes) will require 1st and last month deposit. In NJ or VA, that could mean 3K just for an ehhhh apt., and not including the utilities or cable deposit.
~ I do not know if they still do it, but back when Bullet was ADAF, everytime we PCSd he was allowed to take a 1 yr loan for the amount of 1 mos base pay at 0% int. We always took it. Yet, the reality was that was how much it cost us to set up house again...in the course of 21 yrs and 11 moves, I can say that rarely my curtain rods and curtains fit from one home to the other....so what was I to do? You got it, bought new curtains and if you think the food bill is expensive, curtains even at WalMart are way more! Curtain rods, well don't get me started! And YES I dragged every flipping curtain rod and curtain I ever owned to each and every base, but still I had to buy new ones because either the rod or the curtain was not the right size, color, length, etc.
~~ Pretty sure Capt MJ is laughing and relating to that!
My last piece of advice is to do what DS did once his pay got straightened out, the 5K checking he put aside for his 1st PCS move was placed into a mutual fund money market checking acct for TDY. He has a traditional checking with USAA, but also a TDY account that he uses. For the AF, you get paid when you return from deployment/TDY. He is a C130J pilot. He can be sent TDY for 3 weeks where he needs to pay for rental cars, lodging and food, out of pocket until he returns and submits his receipts. Meanwhile, his car payment, mtg, credit card bills, utilities are all due. In essence, he was paying for both at the same time. That TDY acct allows him to live without impacting his household budget...he is now married.
My point is think about everything before you sign the paperwork. 25K at 2.99 sounds great, but not so much if you are using it to buy a car that you could get a loan at 0%. It is great to take it to invest in a ROTH because long term over the 5 yrs the stock market is going to return at a much higher rate than the 2.99 interest you are paying.
It is important to really really remember that unlike the SA grads your 1st paycheck may take time to catch up to what you need to outlay when you move to your 1st duty station and at the same time that 6 month grace period may be up and the 1st payment may be due.
Just my opinion and with 2.07 cents you can get a small coffee, but I would never suggest to anyone to use all of the loan for a student loan repayment unless you have 5K in the bank for that move.
~ DS basically outlaid 5K for his 1st PCS before his pay caught up. Traveling across country for 4 days costs money. The per diem will not be paid back until you report, so ask yourself where is that money going to come from? Once at that base, staying in the Qs, at least for AF has to be paid for every 10 days, where is that money coming from? Checking or credit cards at now a higher rate than the 2.99? How much can you raid from the folks home and fit in your car to take to your 1st duty station...pots, pans, dishes, sheets, towels,tv, etc.? Even living in the BOQs you need to supply those, if there is no BOQ option than are you going to raid your mattress and furniture from your bedroom, how about the family room sofa? Just saying you will need a bed before that paycheck catches up. Have you ever done a true 1st grocery shop? You'd be amazed how it can cost a single person $300 at the Commissary will only cover the mins....toilet paper, aluminum foil, dish detergent, laundry detergent, hand soap, shampoo, body wash, ziplock storage bags/containers, milk, bread, PB, salad dressing, mayo, tuna fish, mac & cheese, butter, eggs, cheese, salt, pepper, etc are more expensive than most college grads realize and I am not even hitting the expensive crap like meat, cereal, fruits/veggies or a 12 pack of soda/water/gatorade.
Just saying my DS about died when reality hit him for setting up his BOQ, he did not have to purchase furniture, or a tv. He did have to pay for cable. He did have to buy dishes, linens, etc. He spent about $800 the 1st few days. Again out of pocket because as a ROTC grad your pay will be delayed for @2 weeks after reporting. Report on the 28th, well you missed the 1st of the month paydate and now you are waiting until the 15th. Report on the 5th, you make it for the 15th, but you still have 10 days to survive without pay, and your USAA starter loan payment is due on the 7th.
~ I still laugh at him saying Mom do you know how much a small container of paprika cost? Me: Are we doing the Price is Right? @2.49 cents! Think about it...you will be cooking on your own. Salt, pepper, flour, sugar, oil, oregano, are going to be on that 1st shop and from a Price is Right perspective you are not going to walk out even as a single person with less than 300 on your 1st shop unless you of course want to eat Ramen!
~~ DH was ADAF for 21 yrs. 11 moves. When I could I would hand carry (DITY) all of my dry goods, and still it would cost me several hundred just to replace the staples that I could not DITY.
Take the loan, but be smart. Think long term about how you spend it. If you take it and spend every penny to pay down a student loan or buy a car ask yourself where will you get the money to pay for the move? How long is that lag time before reporting? Can you get a job to save up enough money to live for a month with maybe only 1 paycheck while you are now being hit with the USAA loan, and the credit card bill due for you moving to your 1st duty station? Will you need a new car, and how will you pay for that if your pay is delayed?
Finally, because DS was financially frugal, and thought about long term before signing the paperwork, he was able to live without worrying while his pay caught up. If he wanted to go to Popeye's for lunch 5 days a week, he could because he put 5K from that loan into his checking account instead of on his credit card at a higher rate. His friends did not have that option because they used the entire sum for student loans or a new car. He came home for Xmas that year and could pay for the ticket on his debit card, no interest. His friends had to buy their tickets on credit, not because they wanted the points or airline mileage, but because they used it all on the student loan or car and had no safety net.
JMPO, but I think too many people do not realize why it is called a CAREER starter loan. It is to start your career, and they know that when you move it will be VERY expensive. They expect that you will probably rent, and most residences (apts or homes) will require 1st and last month deposit. In NJ or VA, that could mean 3K just for an ehhhh apt., and not including the utilities or cable deposit.
~ I do not know if they still do it, but back when Bullet was ADAF, everytime we PCSd he was allowed to take a 1 yr loan for the amount of 1 mos base pay at 0% int. We always took it. Yet, the reality was that was how much it cost us to set up house again...in the course of 21 yrs and 11 moves, I can say that rarely my curtain rods and curtains fit from one home to the other....so what was I to do? You got it, bought new curtains and if you think the food bill is expensive, curtains even at WalMart are way more! Curtain rods, well don't get me started! And YES I dragged every flipping curtain rod and curtain I ever owned to each and every base, but still I had to buy new ones because either the rod or the curtain was not the right size, color, length, etc.
~~ Pretty sure Capt MJ is laughing and relating to that!
My last piece of advice is to do what DS did once his pay got straightened out, the 5K checking he put aside for his 1st PCS move was placed into a mutual fund money market checking acct for TDY. He has a traditional checking with USAA, but also a TDY account that he uses. For the AF, you get paid when you return from deployment/TDY. He is a C130J pilot. He can be sent TDY for 3 weeks where he needs to pay for rental cars, lodging and food, out of pocket until he returns and submits his receipts. Meanwhile, his car payment, mtg, credit card bills, utilities are all due. In essence, he was paying for both at the same time. That TDY acct allows him to live without impacting his household budget...he is now married.