How to Get Out of Debt—US Veterans

Understand Debt-to-Income Ratio and Residual Income

Debt in America keeps rising. What is the national debt of the US government? It passed $21 trillion for the first time ever in 2018. Not to mention, the total consumer credit card debt of Americans has reached about $927 billion in 2018, which is an increase of 5% over 2017’s total.

The average American debt amount for each household that carries debt is $134,058, which includes their mortgage. If a household carries credit card debt, their total credit card balance is $15,482, on average. Households with credit card debt pay hundreds of dollars per year in credit card interest payments alone.

Many households with credit card debt report that they got into debt because of unnecessary spending. However, many Americans use credit cards to pay for medical bills and other expenses that are rising faster than income. About 27 million citizens may be paying for medical expenses with credit cards.

Americans are also indebted through the following:

  • College student loan debt, which has a median figure of $49,000
  • Mortgage debt, which has an average of $173,000
  • Auto loans, with an average of more than $30,000
  • Personal loans and other debt, with an average of more than $10,000 per household

What is Debt-to-Income Ratio and Why Does it Matter to Veterans?

Have you wondered how to get out of debt? An important number for veterans to understand and improve is their debt-to-income ratio. It’s crucial when you apply for a VA loan. The good news is you can improve your debt-to-income ratio.

What is debt-to-income ratio? It’s a percentage that compares the amount of your monthly debt payments to your monthly income. The higher your debt payments compared to your income, the higher your debt-to-income ratio will be.

For example, let’s imagine your mortgage payment is $1,000 per month and your other debt payments, including credit cards, add up to an additional $300 per month. Your total debt payments would be $1,300 per month. If your income were $3,500 per month, then your debt-to-income ratio would be 37%, which means your debt payments take up 37% of your monthly income.

What is a good debt ratio? If your debt-to-income ratio is higher than 41%, that can disqualify you from taking out a VA loan, although you can work with your lender to get an exception—if you have a good reason.

Besides affecting your ability to get a mortgage, your debt-to-income ratio tells you how difficult your financial situation is. If that number is high, you may feel like all your extra money goes to paying for debts. Lowering your ratio will make it easier to weather unexpected expenses. The further below 41% your ratio is, the safer you’ll be.

VA Residual Income Guidelines

Make a Plan to Improve Your Debt-to-Income Ratio

To improve your debt-to-income ratio, it’s important to make a plan to either decrease your debts or increase your income. Many veterans focus on paying off credit card debt. Then, they only use credit cards to help pay for large expenses more safely, spreading payments over a few months. For many large purchases, though, it’s better to use lower-interest debt, such as an auto loan.

As you know, a high-interest rate on any debt can cause you to pay much more during repayment. It’s recommended that you prioritize paying off debts with the highest interest rates. Credit cards add a finance charge you have to pay every month that you carry a balance. That slows down their repayment.

You could look for ways to save money in other areas to free up cash you could use for debt payments. For example, look for better rates on auto, home, and health insurance. Switching to a higher deductible can lower your monthly payments.

You can also search for unused portions of your insurance plans and cancel those portions. You also may be able to lower your homeowner’s insurance payments by installing a monitored home security alarm.

A Special Opportunity for Veterans to Consolidate Debt

For many homeowners, monthly mortgage payments alone can add up to somewhere between 25% and 40% of their monthly income. Another great way to lower your debt-to-income ratio is with a refinance loan that lowers the amount you pay on your mortgage.

You can also lower your total monthly debt payments using a VA debt consolidation loan. Debt consolidation for veterans is a great option because VA loans have a low-interest rate. You can pull cash out of your home to pay off high-interest debt, such as credit cards, which can lower your monthly interest payments.

Would you like to use your home equity to pay off higher-interest debts? Learn more about a VA Debt Consolidation Loan on Low VA Rates’ refinance web page.

Small Tips Big Changes


Small Habit Adjustments Can Make Huge Financial Differences

Spending Adjustments

For many, it can be extremely difficult to save money and stay on top of finances. There are so many different ways and places one can spend money that balancing your checkbook is no longer as simple as comparing your bank statement with an actual physical checkbook. You need to compare your bank statement with your Amazon order history, other websites you order from, iTunes, and the receipts that you remembered to specifically ask for because most places don’t automatically give them out anymore. For the other 30 transactions you don’t have a receipt for, you have to hope you remember what they were so you know they aren’t fraudulent. Unless, of course, you decide that all that work isn’t worth it, which makes life far simpler, but harder to keep track of finances. Let’s talk about three ways you can change your habits to make a big difference in your finances.


Become an Impulse-Shopping Survivor

Impulse purchases are often a total waste of money, and people experience buyers remorse for impulse purchases far more often than for purchases that are better thought-out. So how do you beat impulse purchasing? Make a habit of considering a purchase for at least 24 hours before making it. If, after 24 hours, you still feel like the purchase would be smart, then it’s a lot likely to be. Some people say that this only works for big purchases, but I’ve noticed this helps me save money in all sorts of situations. For example, if I am out and about for work during lunch and want to pick up food instead of going back to my office and warming up the food I brought, I usually regret it. However, if I plan to go out the next day to get lunch because I’ll already be out, I have plenty of time to think about it and decide whether the money would be well-spent. This applies to everything in life. As an added bonus, this is a fantastic go-to excuse to get past pushy salesmen.


An Ounce of Prevention is Worth a Pound of Cure

Spending Adjustments for HomesIt’s almost absurd how much cheaper prevention is than treatment. This applies to not only your health and the health of your family, but we’re also talking about your home, your car, and anything else major in your life. Changing your oil is a lot cheaper than replacing something that broke because you didn’t change your oil. Running shoes and tossed salad are a lot cheaper than heart surgery or diabetes treatment, and yes, exercise and healthy dieting can go a long way in preventing most heart disease and cancer. Living healthier can be difficult (depending on how bad your current habits are), but it is completely worth it. Properly maintaining your vehicle, even though tires can be expensive, can keep its value up higher, make it last a lot longer, and prevent much more expensive issues from needing to be fixed. Case in point – getting your car realigned is usually $100-$150. Replacing two tires, two calipers, two rotors, and two brake pads because they all got worn down much faster than they should have added another digit onto that price.


Use Your Employment to Your Advantage

Most employers have a plethora of discounts and savings at a bunch of different companies as benefits to their employees. You should be aware of what these discounts and savings are and take advantage of any that make sense. Some of the most common ones are cheaper cell service through a certain carrier, but they can be with certain auto repair shops, restaurants, and even technology companies like Microsoft, HP, Dell, or Lenovo. If you are thinking (at least 24 hours, right?) about a purchase, check what company discounts your employer offers to see if one will help make your purchase cheaper. I used to work at a company that not only had their own gym on campus but also offered a great deal on a membership at a very nice high-end gym downtown. This deal saved me a lot of money while I was there. Employer discounts and savings may also include special deals on getting an IRA or life insurance policy through a certain credit union or bank, and those can make a huge difference throughout your life. Don’t discount the discounts; they can be very valuable to you.


Mortgage for the Self-Employed/Freelancer

Freelance Mortgages

There are a lot of people out there who work as freelancers; wedding photographers & videographers, construction workers, and repairmen are just a few examples. Freelancers are in a unique situation when it comes to applying for a mortgage because their income can be inconsistent and hard to verify. That is why we’ve put together this article with information that can help guide you to the best loan option for you. The things you should keep in mind when you’re getting a mortgage are what program to get it through, what lender to get it through, and what type of loan you should get.


Definitely go With the VA Loan Program

Because you’re a freelancer and your income can be inconsistent and impossible to verify, conventional and FHA lenders are either going to refuse to approve you or slap so many extra fees and restrictions on you that you wish they had refused  you. The VA loan program is different because the VA itself does not impose any restriction or expectation on income or credit qualifications. It’s up to the lender to make sure that the loan is still marketable, though, so don’t expect it to just be a free ride. However, it’s usually easier from a credit and income standpoint to qualify for a VA loan than for a conventional or FHA, so if you are eligible for the VA loan program, you should plan on getting your loan through it.


Get Your Loan with Low VA Rates

Not to blow our own horn, here, but we’re one of the only lenders that does not have a minimum credit score requirement. Granted, if your credit is in the mid-500s then we’ll need to closely examine your credit history, but our decision is mostly based on the credit history rather than just the score. We aren’t promising that we’ll approve you, but if you’re a freelancer and have an inconsistent income, we are going to be much more likely to get you approved than another lender. We are very willing to look at compensating factors and evaluate whether you are really able to afford the loan even under extenuating circumstances such as irregular income or a lack of paper trail evidencing your paychecks.


Start with a VA Hybrid ARM and Go From There

Why? Because a VA hybrid ARM is going to start you out at a much lower rate, which makes your monthly payment much lower, which makes it easier to qualify for. Also, the nice thing about being a freelancer is that you have a fairly good reassurance that 5 years from now you’ll be better off than you are right now. Either you continue freelancing and your clientele grows, or you don’t make enough freelancing so you find a job working for someone else. In the former situation, your income will definitely go up, and in the latter situation, your paycheck is more reliable and friendly to mortgages, and your income may also go up. Another tip to keep in mind is to keep your monthly payment well below 41% of what you consider your average monthly income to be. You want to keep your monthly payment around 25% of your average monthly income so that you never have to worry about not making enough to make your payment.


The temptation here will be to go for a 30-year fixed since it will lower your payment a lot, but what you really should do is simply buy less house and stick with the hybrid ARM or a 15-year fixed.


SummaryStart getting the home you deserve

So, to recap, you want to use the VA loan program to get your loan because it’s going to be friendlier to your credit and income situation than other loan programs. You want to apply for a loan with Low VA Rates because we make a special effort to be understanding of low credit scores and use compensating factors when necessary to help a borrower qualify. You want to at least check out the hybrid ARM to see if it will work for you because it is the most tailor-made to your income situation. And if you have any questions, as always, you can reach out to us on our website or via phone.


Everything You Need to Know About 401ks

Everything You Need to Know About 401ks

Benefits of a 401k

You’ve probably heard of a 401k. You’ve probably heard that it is a good thing because it really is. A 401k is a great way to save money for retirement. There are other ways to save for retirement, including IRAs, life insurance policies, and even day-trading, but all we’re going to talk about in this article is the 401k. This will not be comparing different investing or retirement options, just giving you all the information you need to know about the 401k. We’re going to talk about the advantages of the 401k, the disadvantages of it, and some instructions on how to use it.


Advantages of the 401k

There are quite a few. However, the two most powerful advantages are that contributions to your 401k come out pre-tax and (usually) with an employer match. What does it mean that contributions to your 401k come out pre-tax? In other words, your employer takes out whatever percentage you are contributing to your 401k before tax is calculated on your income. This is actually a huge benefit. Why? Because then your taxes are calculated on a smaller income than otherwise, so if you normally make $2,000 per month pre-tax, and have $1,700 post-tax, and you start contributing $200 per month into your 401k, that means your taxes are calculated off of $1,800 instead of $2,000. So instead of having $200 less each month, because of the discount on taxes, you’ll only have about $150 less each month. You can learn more about this particular feature here.


The next big advantage of the 401k is the employer contribution. This is literally free money. Most employers will offer up to a 3% match when you contribute to your 401k. Some employers require you to contribute more if you want the full match (you may have to contribute 5% for them to contribute 3%), but this is almost always worth it. The employer contribution is one of the things that makes the 401k such a great option because the value of your investment goes higher than your contribution automatically when you contribute to it.


Disadvantages of the 401k

The biggest disadvantage of the 401k is that you can’t touch it without a penalty until you’re 60 years old (technically 59.5 years old). This is because the 401k is intended as a retirement vehicle, and having this restriction helps prevent tax fraud. There are also limits to how much you can contribute to your 401k annually. Your contributions are limited to $15,000 per year by the IRS, and your employer may restrict your contributions further. What can be seen as either an advantage or disadvantage depending on your situation, is that you have to choose where your funds are invested. Usually, your employer will provide a pamphlet or booklet that explains your investing options and instructions on how to make your selection. There should also be a risk guide that tells you how risky each of the options are. With more risk comes greater potential returns.


How it Works

First, you need to find out if your employer offers a 401k at all, and if they offer a match. This should have been covered in the onboarding process when you were hired, but in case you can’t remember, weren’t paying attention, or it wasn’t covered for some reason, you can start by talking to your HR manager or immediate supervisor. Your employer may want you to wait until the open enrollment period to make your selections for the following year, so you may have to sit on your hands for a bit before you can start contributing a portion of your income. If that’s the case, take advantage of the time to learn more about investing and your different options your 401k has. You may also want to practice living with less money from each paycheck.

Planning for Retirement

If you change employers, you can either keep your 401k with your current employer (but it will no longer be contributed to and will just grow based off of its current size) or you can transfer it to your new employer if they have a 401k program. You will probably have to re-select an investing option to use when you make the switch. Your money comes out of your check automatically before you ever see it, so it’s a fairly painless way to invest for your retirement. Investing for your retirement is extremely important, and the younger you are when you start, the better off you will be when the time comes. Don’t be afraid to seek advice if you have questions about what options suit you the best.


How to Diversify Your Portfolio

How to Start Diversifying Your Investment Portfolio


Starting Your PortfolioSomehow, everyone hears at some point about “diversifying a portfolio”. Often, people who don’t know much about finances will use this term to make it sound like they do. However, this is actually a very important financial and investment strategy. The idea behind diversifying your portfolio is simply just putting your eggs in more baskets. That way, if you lose some, you lose all. A lot of people put all their money in their homes, and then when the housing market crashed, they were in dire straits because they didn’t have money in anything else. Industry experts point this as a major reason why the wealth gap exploded around that time – the wealthier Americans had their money in a wider variety of things, while middle-class and working-class Americans had their money in their homes if they had their money in anything at all. So let’s talk about how you can take some simple steps to diversify your portfolio.


Start with Your House

Your house is a great place to start. If you’re currently renting instead of owning, your first step really should be to purchase a residence. Why? Well, what’s the point of investing money at all? To increase wealth. Why bother increasing your wealth? To ensure your ability to maintain and improve your family’s quality of life all the way until you die. The most basic component of quality of life beyond food and water is shelter. So shelter should be your highest priority. Also, every month you pay rent, you’re essentially just flushing that money down the toilet. It’s gone; you never see it again. When you buy a home, especially if you get the right mortgage option, the only money you throw away is the money you pay in interest, taxes, and insurance. All money that goes to principal is just taking eggs from one basket and putting them in another. The real estate market also consistently rises over time, despite occasional dips or crashes, which makes it a fairly safe long-term investment.


Take Care of Retirement – When You Won’t Be Able to Work for a Living

Your next priority should be looking to the future. As hard as it may be to imagine right now, there will come a time when your health, mobility, or other factors will make it impossible for you to continue working. Even if you’re the model of health all the way until your death, you don’t want to have to work beyond retirement age because let’s face it: who wants to spend their entire life working? You should look into a 401k, an IRA, or even overstuffing a life insurance policy. Most employers offer a match, usually around 3%, on a 401k. In other words, you can contribute a certain percentage of your paycheck to your 401k, and the employer will match your contribution up to 3% of your paycheck. If you have this option, you should do this because you’re literally doubling your contribution immediately, and the 401k will grow in value over time because it’s an investment vehicle. An IRA is like a 401k but without the employer contribution. An alternative to an IRA is a life insurance policy that you can overstuff. Speak with a life insurance agent to learn more about that option. Securing your retirement is a great second step after buying a house, because then you can work backwards.


Investing in Stock or Other Risky Investments

Once you’ve started putting money in your home, and you’ve opened a 401k, IRA, or life insurance policy and are contributing to that, the next step to diversify your portfolio can be to go out on your own and see what investments opportunities are available to you. What you should do first, however, is determine how much money you would need access to in order to maintain your current quality of life for the rest of your life without any other income. The closer you get to that amount, the closer you are to being able to retire. When those numbers match, you could retire right then and there if you wanted.


You can take some courses about trading stock and go directly into trading on the stock market if you want, but what can be a much Where to Investmore interesting and profitable (though it is riskier) venture is to become a partner in a small business. There are lots of start-ups that are looking for funding and are willing to trade partial ownership in the company for it. You may not be able to muster all the money they need, but you can still contribute and receive a share in the company for it. Before you do this, though, you should learn a little bit about how that usually works so you don’t get scammed out of the amount of ownership you’re entitled to. For the most part, the amount of ownership should be proportional to the amount you are contributing. For example, if you are contributing $10k, and they are offering you 10% ownership for it, that means they should have at least a $90k valuation before they take your money. If they only have $40k, then you should be receiving 20% ownership for $10k.

Funding Fee vs. Mortgage Insurance


The VA Funding Fee vs. Mortgage Insurance


Pundits for the VA loan program often cite the lack of mortgage insurance as a major selling point of the program, while critics decry the Funding Fee as the uglier and less desirable cousin of mortgage insurance. Who’s right? We’re going to find out right here and now in the oh-so-epic, ultimate showdown between the VA Funding Fee and mortgage insurance. No punches will be pulled and no mercy will be given. To determine which really is superior, we’ll look at three factors: total cost, duration of pain, and the benefits provided. Strap on your seat belts and I hope you brought a fan because it’s about to get heated!


Round 1: Total Cost

IProtecting your Homen this first round, we’ll be looking at the total cost of mortgage insurance (henceforth referred to as PMI) and the VA Funding Fee (henceforth referred to as FF) to see which is really cheaper. So how much is PMI? It varies, but it usually won’t be more than 1% of the loan amount per year, and it will not usually be less than .5% of the loan amount per year. PMI is due monthly as part of your mortgage payment. If you’re on a conventional loan, once you’ve reached 20% equity in the home, you can go through the cancelation process to cancel your PMI. If you’re on an FHA loan, even after you’ve achieved 20% equity, you’ll continue paying PMI until you refinance to a conventional or VA loan. So, assuming it takes you five years to reach 20% equity (which could change depending on how large of a down payment you made), on a $200,000 loan, you’ll pay $10,000 in mortgage insurance, plus the $500 (ish) it costs to get your home re-appraised to determine the current value of your home. If you’re in an FHA, you can count on another $6,000 or so to refinance to a different loan program.


Now, for the FF, it is a one-time payment, but it can be as high as 3.3% if you’re using your VA loan benefits for a second or third time and are not making a down payment. However, since that’s for subsequent uses and not for first-time use, we’ll go with the high for first-time use, which is 2.15% of the loan amount. That means on a $200,000 loan you will pay just over $4,000 upfront though you can finance the amount into the loan if you wish. If you are to refinance, however, you’ll be required to pay it again, also at 2.15%, unless you refinance with an IRRRL (ask one of our loan officers for more info on that), in which case the FF is reduced to .5%. The lowest the FF can get on a new purchase is 1.25%.


Round Two: Duration of Pain

The results from round one seem fairly clear; unless you’re making almost a 20% down payment and are able to get a phenomenal PMI policy, the FF is going to be less overall cost. Now, we mentioned above that PMI is paid each month with your monthly payment either until you’ve hit 20% equity and applied for cancellation of the policy, or achieve 20% equity and refinanced out of an FHA loan to a conventional or VA loan. If you get a 30-year fixed mortgage like most people, it’s easily going to take 5 or more years to get to 20% equity, which means PMI will be affecting your budget for a long time. If you pay the FF all upfront, however, it hits your finances harder at first, but then no longer affects it at all unless you choose to refinance. It’s pretty clear that the FF wins this round as well.


Round Three: Benefits Provided

The FF is the entry fee to all of the benefits of the VA loan program: lower interest rates, better loan options (see VA hybrid ARM), cheaper and faster refinance options, plus protection in case you get underwater on your mortgage and are in a position where you need to do a short sale. There are a ton of benefits to the VA loan program, which you really should learn more about if you are VA eligible. So what benefits does PMI give you? Actually…it doesn’t really give you any benefit unless you count enabling you to purchase a home when you can’t afford a 20% down payment, which the FF also does. The benefit of PMI is for the lending institution, and it protects them in case you default on the loan. That’s why they require it of you; because a lack of a down payment is an indicator that you may not be financially ready for a home or that you might not be too serious about making regular payments.Discussion Concluded



Maybe we’re biased since we focus on offering VA loans, but it seems to us that the numbers don’t lie; the FF is better than PMI in pretty much every way that matters.


How the IRRRL Can Help You Save Money

Interest Rate Reduction Loan

One of the most powerful benefits in the VA loan program is the Interest Rate Reduction Refinance Loan, or IRRRL, which is the VA’s streamline refinance option.

The IRRRL is a refinance option designed to be a cheap, easy, and quick way for you to refinance your loan and get a lower interest rate.

How the VA Streamline Refinance Can Save You Money

There are three main ways that the IRRRL can save you money both in the long run and the short run.

The IRRRL Can Help You Secure a Lower Interest Rate

As the name implies, this is the main purpose of the IRRRL.In fact, the VA will not allow an IRRRL to take place unless the borrower is provided “substantial net benefit”. The VA considers a lower interest rate substantial net benefit, but also a shorter loan term (we’ll talk more about that later in this article), or refinancing from an ARM to a fixed-rate. Using an IRRRL to obtain a lower interest rate is much quicker and easier than using a normal refinance (usually referred to as a cash-out refinance even if no cash is being taken out). No appraisal is required, and no credit underwriting package is required on IRRRLs. Where a normal refinance can take 30-60 days, an IRRRL can be started and finished in as little as 10 days.

The IRRRL is Cheaper than a Cash-out Refinance

There’s two ways that the IRRRL can be considered cheaper than a cash-out refinance. The first is the IRRRL’s true no out-of-pocket option. You still have closing costs and the VA funding fee, but the IRRRL allows you to roll every dime into the loan amount if you choose. This means you can take advantage of lower interest rates right now even if you’re strapped for cash – and that’s exactly why the VA made the IRRRL this way. The second way is that closing costs are generally lower on an IRRRL than on a cash-out refinance. Since no appraisal is required, you obviously don’t have to pay for one, and you don’t have to pay for credit underwriting. Closing costs vary from lender to lender, but IRRRLs will usually have lower closing costs than cash-out refinances.

The IRRRL Can Help You Secure a Shorter Loan Term

The VA allows a borrower to use an IRRRL to drop from a 30-year loan term to a 15-year loan term, even if the interest rate does not lower as a result (though it often will). Many borrowers start out with a 30-year fixed because they feel like that’s the simplest and safest option. In fact, the 30-year fixed results in the most money paid in interest of any loan option you can get. Interest rates are not only higher on 30-year fixed, they’re also assessed for a lot longer. Consider this example: Let’s say you are buying a home in Utah for $300,000. As of today, you could get an interest rate of 3.95% on a 30-year fixed, or an interest rate of 3.22% on a 15-year fixed. If you chose the 30-year fixed, you would pay interest of $212,500.21 over the life of the loan. If you chose the 15-year fixed, you would pay only $78,654.27 in total interest over the life of the loan. This is because not only is the interest rate lower, but the amount of years it is assessed on the remaining amount is cut in half. Now, you might assume that if you’re cutting your loan term in half then your monthly payment is going to double. This is not the case. On the 30-year fixed in this example, the monthly principal+interest payment would be $1,423.61. On the 15-year fixed, the monthly payment would be $2,103.63. That is certainly higher, and by $700, but it is not double. If you can manage the higher monthly payment, you can really save a lot of money by using an IRRRL to drop to a 15-year fixed.


So, an IRRRL can help you save money by providing a quick and accessible way to obtain a lower interest rate on your current mortgage, by allowing you to roll closing costs into the loan and making total closing costs lower than on a cash-out refinance, and by helping you secure a shorter loan term.

Cut your Costs

Three Day-to-Day Money-Saving Tips

For Veterans(or anyone else for that matter)Stretching Your Money

We all know that military members don’t get paid anything close to what they deserve. And recently discharged veterans often have trouble finding gainful employment that compensates them as much as their qualifications justify. We are all hoping the economy gets better, and in a perfect world, unemployment wouldn’t be a problem and everyone would get what they deserve. Until the magical change takes place, however, let’s go over some day-to-day things that you can do to make your dollars stretch farther. We’ve focused on three things you can do to save money that won’t affect your quality of life.


Buy Clothes Second-Hand

Seriously, buying name-brand clothes is a waste of money. You can get high-quality clothes that will last you a long time at Savers, Goodwill, and other secondhand stores. My wife shops for clothes at secondhand stores all the time and people are always complimenting her on how she looks. Some of my favorite pairs of jeans have come from secondhand stores. The worst thing you can do is let your pride get in the way of saving money. If you believe in the Bible, remember that pride goeth before destruction. If you don’t believe in the Bible, remember that the type of pride that stops you from shopping secondhand is irrational and stupid.


Cook at Home Instead of Eating out

We talked about this in our last money-saving tip, but it’s such a big issue in American culture that it’s worth twenty articles. Seriously, the average fast food combo meal is going to cost you between $6-$8, sometimes higher depending on where you live. If you’re a dollar menu kind of person, it’s still going to be at least $3 plus tax, and maybe as much as $5. A cup of coffee costs an average price of $2.38. If you bought a coffee at that price every morning before work, that coffee is going to cost you $618.8 per year ($2.38*5 working days each week*52 weeks). Compare that with the 45 to 50 cents per serving of coffee you would spend on home-brewing your own coffee. You can save over $500 per year on coffee just by brewing your own. The exact same principle can be applied to each meal you cook at home instead of eating out. You can eat darn well for $1 per person per meal by cooking at home, depending on where you live. In more expensive areas, you can still eat like kings for $2 per person by taking the time to cook at home. The home-cooked food is also superior to restaurant food in many ways, not least of which is nutritional value and relative fat and sugar content.


Keep Track of What You Spend Money On

The more vigilant you are in regards to your budget, the more money you can save. If you’re anything like me, though, you don’t have the stomach for setting up a budget and constantly adding expenses and categories to an excel spreadsheet and living your life based on whether you’ve met or exceeded a budget you arbitrarily set in an attempt to be responsible. I’ve found that I get a good investment on my return by using to keep track of what I spend my money on. It’s a real eye-opener when you see that you spent over $4,000 on eating out over the last year. Suddenly I don’t feel like I have the right to complain that I drive a 1995 Toyota Corolla. Nothing motivates better than the realization of all the money you could have had right now if you’d exercised a bit more discipline in your spending and eating habits. I would recommend you use or another online way of tracking where you spent your money. You’ll want to log in at least once a week to make sure that Mint is classifying transactions correctly and see where you can change your spending habits.



These are three simple things that you can do to save money and at least maintain, if not increase your standard of living. You don’t have to do these things, but you should probably stop complaining about having no money if you choose not to.


New Categories Allow Guard and Reservists to Retire Early

As of January 2013, Congress authorized more categories to the 2008 National Defense Authorization Act, which originally applied only to reserve-component Soldiers serving in overseas contingency operations like Iraq and Afghanistan. The new categories mean more guard and reserve soldiers will now be eligible to receive retirement pay before 60, provided they meet certain criteria. Many soldiers have already taken advantage of the early-age retirement option.

The expanded early retirement criteria are undoubtedly linked to the military’s reduction in force plans. Selective early retirement is one way in which soldiers can be incentivized to leave the military ranks. In an interesting paper written for members of Congress, Andrew Feickert, a specialist in military ground forces, discusses the Army’s options for conducting its mandated restructuring.

In his summary statement, Feickert notes “ the Army can employ a variety of involuntary and voluntary drawdown tools authorized by Congress, such as Selective Early Retirement Boards (SERBs) and Reduction in Force (RIF). Voluntary tools that the Army might use include the Voluntary Retirement Incentive, the Voluntary Separation Incentive, Special Separation Bonuses, Temporary Early Retirement Authority, the Voluntary Early Release/Retirement Program, and Early Outs.”

The Pentagon plans a reduction in force of 67,100 soldiers from active and reserve Army units and the Army National Guard in the five years starting Oct. 1, as well as 15,200 from the active and reserve ranks of the Marine Corps as part of an effort to save $487 billion over a decade, according to the most recent budget sent to Congress. The Navy and Air Force would lose fewer people— 8,600 and 1,700 respectively –because of their role in a strategic shift toward the Asia-Pacific region and the Middle East.

New Categories Added for Early Retirement

The new categories for early retirement include reserve-component soldiers who are activated to respond to national emergencies such as natural disasters like hurricanes or earthquakes. Another category is for those in warrior transition units who were hurt while mobilized for such responses.

Soldiers can find out if they meet the new criteria by checking their mobilization orders or their DD-214 discharge document. Those documents need to have any one of the following Title 10 or Title 32 U.S. codes annotated: 12301(a), 12301(d), 12301(h), 12302, 12304, 12305 or 12306.

If you think you might be eligible, you can check with Human Resources Command for eligibility information. The HRC can be reached by calling 502-613-8950.

Soldiers will still need to wait until their 60th birthday before they are eligible for Tricare, according to Sheila Dorsey, Chief, Reserve Component Retirements. Other than that, they will receive the normal retirement benefits such as exchange and commissary benefits.

How the New Categories Work

Eligible soldiers can accrue reduced-age retirement as follows:

  • During any fiscal year, soldiers can accrue 90 days of early retirement. Fewer days will not count or be carried over to the next fiscal year and more days past 90 will not count and will not be carried over to the next fiscal year. That 90-day period does not have to be contiguous. It could be the sum of more than one mobilization, so long as it meets the U.S. codes within that fiscal year.
  • Another rule is that the 90 days can accumulate over fiscal years. For example, if a soldier gets 90 days credit this fiscal year, he or she would be able to retire 90 days before age 60. Then, if a soldier also gets 90 days credit next fiscal year, he or she would be able to retire at age 59.5, or 180 days before age 60.

The accumulative effect can continue for a number of years in 90-day blocks, with the only stipulation being that a soldier cannot retire before age 50.

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Can A VA Streamline Mortgage Save You Money?

There is a refinance program currently being offered by the Department of Veteran Affairs. If you currently have a VA mortgage loan, then you may qualify for the VA Streamline loan for veterans. Whether you’re in active duty or previously served in the military, your VA mortgage is offering relief.

Saving money has never been so easy. You’ve served your country and are a veteran – so why not cash in on the benefits of being one?

In today’s economy, the government is actively trying to get everyone back on the right path. If the mortgages across the country can be repaired, then the economy begins to improve. The VA streamline loan for veterans is an interest rate reduction loan. It’s not only simple, but easy to qualify for. It’s the best mortgage refinance option available on the market – if you are a veteran.

Look around at other refinancing options. You’ll learn that you’re responsible for a fair amount of fees involved with refinancing, and often, the rate will still be adjustable, meaning that your significant savings could be short-term.

If you are currently paying an interest rate of 5% or higher, then this is definitely a loan you should consider. Whether you currently have an adjustable-rate or a fixed rate mortgage with a VA loan, you can qualify for this new loan. The rates for this loan are at an all-time low and can save you hundreds of dollars every month. Plus, it’s a permanent, low fixed-rate, so you’re locked into the great rate without worrying that it could go up.

By saving money on your mortgage, you can spend your hard-earned money on other things. Paying off other bills will mean that you’re not paying so much interest, which will in turn help you save even more money. Ultimately, if everyone is able to get back on their feet, then the economy turns around. A streamline mortgage is your best option for improving your personal finances.

The loan on your home and its current value can vary quite a bit. A 1% decrease in your interest rate can save you anywhere between $100 and $600 every single month, without spending any money out-of-pocket. Closing costs and pre-paid points can all be rolled into the new loan amount. You can even get your current escrow account credited back to you.

A VA streamline mortgage can be just the thing you’ve been looking for to save you money. Not just a little money, but a significant amount. When there’s no money required from you, saving hundreds of dollars every month can have a dramatic impact on your overall financial liquidity and thus, your lifestyle.

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*Annual savings calculator based on 2015 monthly average savings extrapolated year-to-date.