Before You Take on Debt
Debt isn’t something you jump into blindly. To make sure you consider all the variables, grab a pen and paper, and analyze its RIFF (Repayment Terms, Interest Expense, Future Income, Future Situation).
Repayment Terms
How long will it take to pay off? Will it travel with you to your next duty station? If you need to stretch out the repayment terms just to afford the payment, it’s probably not a good idea. Usually, the longer you pay, the more you pay.
Interest Expense
What’s the total cost of the debt going to be by the time it’s paid off? Compare the purchase price to the total of your future payments and you will probably be astonished at how much interest you’re actually paying.
Future Income
Even if you can afford your payments today, you should be fairly certain that you will be able to continue making them until the debt is paid off. What will you do if you can no longer afford the payment some day?
Future Situation
What looks like a good decision today might not look so good three or four years from now. For example, before taking on loans for cars, motorcycles, ATVs, boats, etc. as a military family, think about how you might handle a PCS to a location where the vehicle isn’t practical; especially if you might owe more on it than it’s worth at that time.
MilLife Milestones
Financial Readiness
Before You Take on Debt
Debt isn’t something you jump into blindly. To make sure you consider all the variables, grab a pen and paper, and analyze its RIFF (Repayment Terms, Interest Expense, Future Income, Future Situation).
Repayment Terms
How long will it take to pay off? Will it travel with you to your next duty station? If you need to stretch out the repayment terms just to afford the payment, it’s probably not a good idea. Usually, the longer you pay, the more you pay.
Interest Expense
What’s the total cost of the debt going to be by the time it’s paid off? Compare the purchase price to the total of your future payments and you will probably be astonished at how much interest you’re actually paying.
Future Income
Even if you can afford your payments today, you should be fairly certain that you will be able to continue making them until the debt is paid off. What will you do if you can no longer afford the payment some day?
Future Situation
What looks like a good decision today might not look so good three or four years from now. For example, before taking on loans for cars, motorcycles, ATVs, boats, etc. as a military family, think about how you might handle a PCS to a location where the vehicle isn’t practical; especially if you might owe more on it than it’s worth at that time.
MilLife Milestones
Financial Readiness
Our Blogs
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Now’s the Time to Think About Life Insurance
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Budget and Insurance: What to Do After You PCS
After months of planning and hard work, you’ve landed safely at your next duty station. Congratulations! As you kick off this next chapter in your MilLife, it’s a good time to check in on your finances. Let’s look at two key items that are likely to change after a PCS: your budget and your insurance.…
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