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Military Banking – You Need more than USAA

February 5, 2017 by Casey

I’ve been reading the Bogleheads forum lately. For those not in the know, it is an outstanding personal finance and investment web site based on advice from Jack Bogle. One thing that caught my eye is that most military personnel are using a certain trio of banks once they grow beyond basic checking and saving account requirements. I realized I have done the same.

Where USAA Shines – Banking and Insurance

I joined USAA in 2003 and was impressed with their outstanding customer service. Their checking and savings accounts are free. The ATM rebates are nice. Their customer service when dealing with insurance claims is amazing. I still have USAA today for checking/savings/insurance.

As I added accounts, my first hunch was to always go with USAA. Over time, I realized that is a mistake. I first learned that when shopping for a mortgage for my first home. Other banks were easily beating the rates quoted by USAA.

Shop Around for Home/Auto Loans

When it comes to home mortgages and auto loans, you really need to check Navy Federal and Pentagon Federal Credit Union. Their rates almost always beat USAA. These banks have very good reputations and quality customer service. One thing to keep in mine is the ‘customer service’ aspect is not as important when it comes to loans. Once the deal is done, you pay it back at the agreed upon rate.

Use Vanguard for Investments Beyond TSP

One thing you will learn on Bogleheads is to avoid USAA for investments. Of course, you should always max out TSP first. But if for some reason you are looking outside TSP (like me with my wife’s retirement fund), then you want to look at Vanguard. Why? USAA’s mutual funds have high expense ratios.

For example, the USAA First Start Growth Fund has an expense ratio of 1.44%. The Vanguard Retirement Target 2050 fund has an expense ratio of 0.16%! USAA takes much more of your money to run their investment fund as compared to Vanguard. That is money that will slow down your returns over the long haul, likely taking thousands out of your retirement fund.

I will not dive into returns in this post, but overall Vanguard has a sterling reputation as compared to other mutual funds when it comes to performance.

You can read more about why expense ratio is important here.

Filed Under: Save Money

Should You Sign Up for a Military STAR Card?

June 24, 2016 by Casey

MilitaryStarCard NoNo. No you should not sign up for Military STAR card, ever.

Every time I see a promotion for Military STAR card at the BX, a part of me dies inside. I was once a young Airmen shopping at the BX, naively thinking a STAR card would be ‘good for me’ and allow me to grow my credit. A year later my STAR card was maxed out, and just another bill to be paid on top of several others.

Here are several reasons to avoid the STAR card.

You Do Not Need a STAR Card to Build Credit

I know what you are thing… ‘I’m young and have no credit. This is a great way for me to get started.’ What do you need credit for anyway? To buy a car?

Well guess what, you know who already has sufficient credit to buy a reasonable car? People in the military with a steady job and income!

Local credit unions and banks such as USAA are willing to give you a car loan at a decent rate based solely on your active status in the military. So you do not need to build credit via credit cards to appear attractive as a borrower in their eyes.

You Are Unlikely to Pay Off the Card Every Month

If everybody got a STAR card and paid it off every month, then the program would no longer exist. The reason the offer 10% off your entire first purchase just for signing up, is they know you will rack up a balance on the card and not pay it off.

When you pay the minimum balance on that card, you are paying interest directly to the card company, which as of December 17, 2015 is 10.49%. According to this credit card calculator, it will cost you $10 per month and 11 years to pay off the card! That is basically $10 per month out of your budget, going nowhere!

You Will be Penalized for Late Payments

no fees
Not true. Your interest rate will increase if you pay late. That is essentially a fee.

Paying a $500 balance on time will cost you around $10 per month. But if you are late on your payments, the interest rate goes up to 18.49%! It would now take you 21 years to pay off that same balance using the minimum payment.

As a bonus, AAFES can contact your military leadership if you late on payments, negatively highlighting you.

The Rewards Program is Not Worth the Risk

So the Military STAR card gives you 10% off your first purchase when signing up for the card. You can also get 5% off when purchasing gas (same as most grocery stores offer with no credit card). Say you spend $300 during that first purchase and save $30. The card company will make that money back (and you will lose that money to interest) in about six months if you do not immediately pay off the balance.

Need new boots like the guy in this video? First – talk to your resource advisor and see if you can get boots through your unit. As a second option, save up the money and buy them with cash! If you have a steady paycheck and are being responsible then why is your first option to buy boots on credit?

Shame on AAFES for putting military in uniform into these videos.

Need more reasons to not get a Military STAR card? Check the top comment to a Reddit thread discussing the same question:

There are lots of better options out there. If you have absolutely zero credit or something, it can get you started, but it’s really not a great card.

To sum it up, you don’t need a STAR card to build your credit, the rewards program is crap, and your credit will be negatively impacted if you pay late.

Stay away from Military STAR card!

Filed Under: Save Money

Five Books That Will Supercharge Your Military Career

August 20, 2012 by Casey

Today I want to introduce you to five books that have influenced my life in every way. These books are straight forward and simple, but yield amazing results.

1. Getting Things Done by David Allen

Getting Things Done

Productivity. It’s essential in today’s military. There’s not enough time to accomplish everything on your To Do list. Your head feels cluttered trying to keep up with your primary job, family, volunteering, and college. Getting Things Done is the answer to the knowledge worker’s problems.

In his book, David Allen shows you how to capture everything that you think about into a single system. Write down all your projects and commitments. Organize them by context, or the place where you will likely accomplish them. If something takes less than two minutes, do it.

I’ve used GTD for five years now and have accomplished so much. I feel good about myself knowing I’m keeping up with my job and not neglecting my family. Give GTD a try!

 2. Total Money Makeover by Dave Ramsey

Total Money Makeover

The first books I read on personal finance were about investing. I was really into the Motley Fool and Rich Dad Poor Dad. Those books are great, but you need to read Total Money Makeover first. Why? You need to have your finances in order before you start investing.

You need an emergency fund (at least $500). You need to pay off your credit cards and get out of debt (for good!). Dave Ramsey calls these baby steps and he lays them out in plain english.

Dave Ramsey has a great radio show that will keep you on track. My favorite thing about Dave Ramsey is how he keeps you motivated!

3. How to Win Friends and Influence People by Dale Carnegie

How to Win Friends and Influence PeopleA huge part of leadership is learning to deal with people. I can’t think of a better way to learn this skill then by reading How to Win Friends.

This part of the book has always stuck with me:

Remember that a person’s name is, to that person, the sweetest and most important sound in any language.

This book shows you how to treat people, whether it’s in the workplace or not. I’ve given this book to several NCOs that were trying to improve their leadership skills, and have seen improvement in every one.

Improving your relationships will improve your life. This is a book that everybody should read at least once.

4. Seven Habits of Highly Effective People by Steven Covey

The 7 Habits of Highly Effective PeopleThis is a great all around book on improving yourself. If you want to get promoted at work, just try implementing the first seven habits:

Be Proactive
Begin with the end in mind
Put first things first

There are countless books written on each of these three subjects alone. Steven Covey covers them brilliantly and in a simple fashion. His final habit “Sharpen the Saw” reminds us to continually read, learn, and exercise to keep our bodies and minds in excellent shape.

5. Body for Life by Bill Phillips

Body for LifeBody for Life is a great book that will help you get in shape. It not olny covers fitness, but also eating healthy. The support files on the web site are great and help keep you on track.

Filed Under: Career, Save Money, Save Time

Free for Military – Great Military Discounts

August 13, 2010 by Casey

Here’s my list of the best military discounts and coupons:

1. Home Depot and Lowes – 10% off every day! Just show your military ID.

2. Microsoft Office – $79.99 for Home and Student Edition

3. CNN Tour in Atlanta, GA – free

4. American Airlines Admiral’s Club – free when traveling for deployment or R&R

5. The Finish Line (shoes) – 20% off

Filed Under: Save Money

How to Stay at the Best Hotels for Cheap using Government Rate

July 22, 2010 by Casey

government rate hotels
I stayed at this hotel for $92 a night!

Every military member has a secret weapon when it comes to finding great hotel bargains:  it’s called government rate.

For instance, this summer I traveled from South Carolina to Texas for a school. Based on the distance, I knew I wanted to stay one night in Birmingham, AL. Here’s what I did to find a great hotel near Birmingham:

1. Enter the planned city into TripAdvisor

2. After reading reviews I chose to check rates for the Renaissance Ross Bridge Golf Resort & Spa

the results after searching for my hotel

3. Visit the hotel web site and look up their government rate and availability (if you can’t check online, then call)

military or government rate

The advertised rate on Trip Advisor was $193, but our government/military rate is $92!

government rate results

4. Check fees to ensure the rate is not just a tease

Luckily parking was free.  Taxes and fees came out to $12, so my total for each night was $104.88.

Warning:  Some higher-end hotels make a killing on parking, internet, and service fees. Know what they are before you make a reservation.  In general, expect to pay high parking fees in any big-name hotel located in the middle of a congested city.

5. Make a decision based on total rate vs. quality

This hotel was a no-brainer.  It was one of the nicest hotels we’ve ever stayed in.  We didn’t want to leave.

Deals like this are everywhere.  But you have to dig around to check the rates.  Be optimistic and go for the best hotel, you just might get it for cheap!

Filed Under: Moving, Save Money

Top 3 Banks Offering Low VA Mortgage Interest Rates

July 19, 2010 by Casey

Compare rates among these three banks.  Whichever you choose, you’ll end up with a very competitive rate, low fees, and outstanding customer service.

1. Pentagon Federal Credit Union – my first home loan was through PenFed. I found them through the FatWallet finance section.  When every bank offered me 7.0 percent, PenFed came in at 6.25.  They are very competitive with closing costs as well.

2. USAA – while USAA may not always have the lowest rate, they are competitive and should be compared when shopping for a home loan.  Their customer service is unmatched. One caveat:  USAA transfers the servicing of your home loan to US Bank once the application process is complete. I refinanced with USAA and was bummed to find out that I had to use a separate website and login.

3. Navy Federal Credit Union – I consistently see NFCU compared with PenFed and USAA as having the best rates in the business.

Who do you recommend when comparing home loans? Let us know in the comments.

Filed Under: Real Estate, Save Money

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