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This guest post is from Ryan over at Semper Finance, a blog that helps brave Marines to avoid getting cut down in financial crossfire.

Enjoy.

Steve

Hello all, Ryan here, author of Semper Finance. I served 4 years honorably in the US Marine Corps infantry. The Marines I served with possessed many admirable qualities, like bravery, loyalty and discipline. Yet somehow many of my enlisted peers were missing basic personal finance skills. My blog, Semper Finance, aims to provide easy to understand financial advice to Marines and other members of the military (or really anyone who wants to read some kick-ass blogging), from getting out of debt, to getting into the stock market.

I am pleased to have the opportunity to post here on Steve’s excellent blog–Credit, Debt, Life–some of the common financial problems that Marines and other military servicemembers encounter, and what you can do to fix them.

1. No Savings.

There is a downside to always being able to eat in the chowhall and sleep in the barracks–you don’t need to save money. Civilians have to save money to be able to make rent and buy food, Marines don’t have this problem. Unfortunately, because Marines will not go hungry and will not be evicted they tend to spend their whole pay check.

This is a really bad habit to get into (one that took me about 2 years to break), and a difficult one to get out of. If you find that you are in this habit, perform first aid on your bank account immediately–cut your spending to 50% (or less) of your paycheck and start saving up for an “emergency fund.”

An emergency fund is typically six-month’s pay and it is for real emergencies only. Examples of emergencies: paying medical bills, unforeseen legal expenses, posting bail. Examples of non-emergencies: lap dances, new Xbox, lavish dwarf parties. Remember an emergency fund exists to keep you out of debt, and if you do have to borrow money you will be able to receive much better terms if you aren’t broke.

2. High Interest Debt.

One common consequence of having no savings, is acquiring high-interest debt. High-interest debt comes in many forms, if you have any form of it–pay it off immediately. This means you should spend the bare minimum to exist until you pay off your debt. Once your debt is repaid, see Step 1 and start saving.

Some common forms of high-interest debt include:

  • payday loans–Members of the US military have the most reliable paycheck there is (Uncle Sam) so scam artist loan companies will front you your paycheck for a ridiculously high fee. This ensures that you are broke before next payday, and therefore need another loan.
  • credit cards–Again, everyone loves to loan money to military servicemen and women because they have a steady paycheck. Get credit cards from a credit union that is looking out for you. If you have large credit card bills from before you joined the military, you may be eligible to have them reduced to 6% under the Servicmembers Civil Relief Act (SCRA, a useful resource, look it up!)
  • overdraft protection–Protection, ha! If you’re bank is charging you $30 every time you overdraw your account then you are paying ridiculously high interest. Think about it, you over draw by $60 and repay $90 the next week. Thats 50% interest in 1 week! Do not overdraw your account (see step 1).

3. Bad Credit.

The end result of having no savings and high interest debt is of course, bad credit. Fixing this is of course what Steve’s blog Credit, Debt, Life is all about. Peruse through his articles and find what applies to you. If you have bad credit, don’t worry, its not the end of the world and you can fix it over time. If you have good credit, do your best to keep it that way.

Here are some quick tips on fixing bad credit/keeping good credit:

  • pay bills on time.
  • don’t bounce checks.
  • keep your credit card balance low. Having a high balance on your credit card negatively affects your credit score. If you spend a lot of money on your card, make sure you pay it off that month.
  • don’t own too many credit cards.
  • the longer you own a credit card, the better. Creditors like to see loyalty in a customer, so if you are going to close out a card, close the newer ones first.
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Steve

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