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I remember a USMC General said that E-4 and below should not allowed to be married. That was years ago and he got a lot of flack for saying it, but he was right.
I mentioned it in another thread you are on, borrowing for a car is not a bad idea. I can buy a minivan from just about every manufacture out there for 0.9% for 60 months, and I can get 1.49% from USAA, why would I take money out of my brokerage account where it's been seeing gains "just a tad bit more than that" and sock them into a depreciating asset? And dealers get kickbacks for getting customers to finance so they'll work with the price a bit more if they know you're going to use their finance (they also hope their F&I guy can get you to buy all sorts of add ons, but that's a whole other animal).
And yes you're right, there is a big difference between $9.6k and $38.4k, but the typical car loan is 60 months, and sometimes you hope for benefit of the doubt.
You realize you're the exception and not the rule though right? Most who borrow for a car are doing it to buy a more expensive car than they could come up with the cash for, and this is bad. Being able to pay cash but not doing so in order to retain investments is not so bad.
You even implicitly admit this yourself, as the budget you posted in the OP doesn't include either saving for a(nother) car or investing!
I was in Norfolk, VA in the 90s. Far too many dealerships had the "we finance E-4 and below" signs with nearly illegal to illegal interest rates.
That's why, when I was in DC in the late 80s, the Air Force required every member regardless of rank to run an auto purchase contract past the legal office. Some of them had gotten extremely subtle.
You realize you're the exception and not the rule though right? Most who borrow for a car are doing it to buy a more expensive car than they could come up with the cash for, and this is bad. Being able to pay cash but not doing so in order to retain investments is not so bad.
You even implicitly admit this yourself, as the budget you posted in the OP doesn't include either saving for a(nother) car or investing!
I know it's not typical to have the cash to buy a car (and kinda akward, I once went to buy a civic w/cash before I fully understood investing and the dealer looked at me funny when I pulled two banded stacks of 100's out of my cargo shorts, plus banks get huffy about cash transactions of over 10k), but properly borrowed money is nothing to fear.
As far as saving/investing:
They are making an extra $5k a year beyond their bills (to include entertainment), and will get back another $3k or from the Earned Income Tax Credit, giving them $8k a year beyond comfortable expenses. Now I don't think they are really making enough to invest, but they shouldn't be broke, even with a car.
I remember a USMC General said that E-4 and below should not allowed to be married. That was years ago and he got a lot of flack for saying it, but he was right.
I remember that (it was 'way back in the mid 90s, unless it's been repeated since).
It was definitely true for Dept of Navy junior enlisted, not just because of finances but also because of the difficulties of Naval deployments. Broke and alone is no way to leave a wife and family with an expectation of a long and healthy marriage. It sucks less in the Army and Air Force, but it can still be very difficult.
One thing not often mentioned is the hit a working military spouse takes with every PCS. I was pretty lucky. My wife was a special education teacher, and everyplace needs special education teachers--even when we were overseas, DODDS always needed special education teachers, so she always got quick extended contracts.
But for most spouses, a PCS means three to six months without a job--likely no job at all overseas. That means married junior enlisted really need to budget for the military paycheck alone or they're heading for hard times.
I remember that (it was 'way back in the mid 90s, unless it's been repeated since).
It was definitely true for Dept of Navy junior enlisted, not just because of finances but also because of the difficulties of Naval deployments. Broke and alone is no way to leave a wife and family with an expectation of a long and healthy marriage. It sucks less in the Army and Air Force, but it can still be very difficult.
One thing not often mentioned is the hit a working military spouse takes with every PCS. I was pretty lucky. My wife was a special education teacher, and everyplace needs special education teachers--even when we were overseas, DODDS always needed special education teachers, so she always got quick extended contracts.
But for most spouses, a PCS means three to six months without a job--likely no job at all overseas. That means married junior enlisted really need to budget for the military paycheck alone or they're heading for hard times.
I remember someone mention how a 3 month to 6 month extension to a carrier deployment was correlated with a drastic increase of the divorce rate.
My supply officer at one post was told by his wife that there would be no children till he left the Navy.
And I too recall that General or a General saying that and how he was hit with being "anti family".......but he was probably right. I say probably because having never been married.....I could be wrong......but in that situation I would have my doubts.
I know it's not typical to have the cash to buy a car (and kinda akward, I once went to buy a civic w/cash before I fully understood investing and the dealer looked at me funny when I pulled two banded stacks of 100's out of my cargo shorts, plus banks get huffy about cash transactions of over 10k), but properly borrowed money is nothing to fear.
As far as saving/investing:
They are making an extra $5k a year beyond their bills (to include entertainment), and will get back another $3k or from the Earned Income Tax Credit, giving them $8k a year beyond comfortable expenses. Now I don't think they are really making enough to invest, but they shouldn't be broke, even with a car.
You can't spend the money both on entertainment and on a car. Each dollar can only be spent once. If your budget has them spend it on entertainment, then they won't have it later on. If they get a car loan after following your budget for a few years because they blew their disposable money on entertainment, they have essentially gone into debt to pay for the entertainment. And they have no investment to show for it. It's irrelevant what return an investment can earn if you don't have any investment to begin with!
You realize you're the exception and not the rule though right? Most who borrow for a car are doing it to buy a more expensive car than they could come up with the cash for, and this is bad. Being able to pay cash but not doing so in order to retain investments is not so bad.
You even implicitly admit this yourself, as the budget you posted in the OP doesn't include either saving for a(nother) car or investing!
Seriously, we get you don't like debt but stop with the generalizations.
Taking out a loan you can afford is not a bad thing. People with such an adverse view towards debt are just as bad as the ones who overextend themselves.
I teach my junior guys to be responsible which means buying a normal, well priced, reliable car with a fair interest rate as well as saving for retirement and separation (if they're getting out). Blowing a good portion of your savings on a car because you don't want a loan is irresponsible.
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