You don’t ever forget arriving at your first duty station. You’ve just come out of training and now you’re a real Airman. Or Solider or Marine or Sailor. You’re an adult with a steady paycheck and making decisions on your own. It sounds great but can be a recipe for financial disaster if you aren’t careful. These mistakes are all true stories of a Service member I have helped with their finances. Let their mistakes be a lesson to help you avoid costly mistakes. Today’s What the Heck Wednesday is what are the financial mistakes you make at your first base?
1. Buy a New Car
You buy a brand new car as soon as you arrive at your first duty station. And it’s one you can barely afford to make the payment on. Even though there’s a base shuttle or your roommate with a car works in the same location as you, you still insist that getting a brand new car is a necessity. To add another degree frustration, you haven’t built up your credit yet so you end up with an 18% interest rate on your new car loan. What you should do is stick it out taking the shuttle or bumming rides while you save up money for a down payment. Then take a car buying class from the financial support office on your installation. That way you’ll understand how much you could afford to pay plus you’ll know how car buying really works.2. Listen to Unqualified Advice (The Barracks Lawyer)
You take your unqualified friend’s advice on important matters such as buying a car or home, divorce, debt and personal finance in general. Trusting your roommate who can’t afford pizza to give you sound financial or legal advice is asking for trouble. It’s hard to understand why you would take an unqualified person’s advice when you have access to legal and financial professionals for FREE. They have real education and experience in the subject matter. What you should do when you have financial and legal questions is ask a professional. Take advantage of the free legal and financial services to help you avoid costly mistakes in your finances.3. Pay to Play
You pick up the tab for pizza, Ubers, beers and more so all your buddies will stay and keep the party going. Yes, that is exactly what you’re doing when you’re playing Xbox with your broke buddy and order pizza so he’ll stay and play. Or you want a bar hopping buddy for Saturday night and say you’ll pay for all the beers in exchange. What you should do is not pick up the tab for everyone. If you want to go out, go out but have a budget for it. Don’t spend and spend to keep the party going. Set limits on your spending and the spending you do on others.4. Rent Furniture
You head to a rent center place because you’re sick and tired of hauling your laundry to and from the laundry mat. Or you want (not need) a new TV for your dorm room but don’t have the money to buy one. You have the great idea to rent a TV instead. Please stop renting appliances and furniture, please. When you rent those items it ends up costing you more money than it would to pay cash. It’s not worth getting stuck in a contract and making payments for years. Instead, you should check out the Goodwill or similar services they have on military installations. If you just PCS’d you can use the base lending closet to borrow household items temporarily. You can also check out Craigslist to get household items at a lower cost.
5. Get a Payday Loan
You frequent the payday loans places right outside the base gates. You aren’t managing your money and overspend every month. When bills come due that you can’t pay, you end up right back at the loan place. You take out a $500 loan here and a $300 there to cover your living expenses. What you should do is get free help with your financial mistakes. Army Emergency Relief, Air Force Aid Society and Navy-Marine Corps Relief Society can help you in financial emergencies. They can give you 0% loans to help. The military relief societies are not for profit and have your best interest in mind, unlike payday loan places.6. Don’t Use the DFAC
Even though you have a meal card provided to you from the military, that pays for all your food, you still go to McDonald’s for breakfast lunch and dinner instead of eating at the dining facility, a.k.a the chow hall, a.k.a the mess hall. What you should do is instead is eat the free food at the DFAC and budget for going out to eat occasionally.7. You Buy Stupid Stuff
- You buy a used Corvette with your bonus money but can’t pay rent so you live in it
- You buy a $2,000 vacuum but you only make $2,000 per month
- You buy your girlfriend’s niece $100 worth of clothes each month
- You borrow money to buy $3,000 worth of rims and tires
- You use your credit card to buy your daughter $1,000 worth of princess gear at Disney World (in addition to the trip).
8. Getting a DUI
Thankfully, not everyone in military service does this but unfortunately, there’s still enough that I need to say it. You go out for a night out on the town with no plan on how you’re going to get home after you’ve been drinking. Or you don’t want to spend the money on a taxi or an Uber to get home. But what you don’t realize is it’s cheaper to get an Uber or a $300/ night hotel than it is to get a DUI. When you add up the fines, fees, attorney and insurance costs you’re looking at around $10,000 for getting behind the wheel after you’ve been drinking. What you should do is take turns with friends being designated driver or get an Uber or get a hotel room. Or even better, stay home and save the money. We all make financial mistakes. Life happens and we learn from it. But it’s important to try to avoid financial mistakes when you can. Especially when you are new and getting used to military Service. Good decision-making and planning play a major part in managing your finances successfully at your first base.
