Negative on the TSP. That's for your retirement, not home building.
Start a savings program. Scrub your budget and see where extra money may be available. Are you having the right amount of taxes withheld? Can you downsize your expenses? Look at your grocery budget, entertainment, cable, telephone, utilities, snacks, and each and every thing you spend money on. Save your income tax refund(s). Or use it/them to pay down debt.
Eliminate costly subscriptions. Cancel unused gym memberships. Use the library. Brown bag. Go easy on wearing dry-cleaning clothes. Skip restaurant meals. Consolidate errands to reduce unnecessary driving.
Bump up your current savings into higher interest investments. See what Money Market Accounts and CDs are paying in your area.
Get a part time job. Work harder to get advanced/promoted. Can a spouse work?
someone told my fiance that TSP is the best option the CG has for buying a house so i was assuming same is for building. He said that you won't get penalyze if you take money out early for buying a house. Did we receive false information? I know he puts a good amount of money in the TSP as the sole reason to buy a home.
I am new to the military (i am a civilian, soon to be a CG spouse) thank you in advance.
The purpose of TSP is to save for your retirement years, not to save for a home purchase. TSP is a supplement to your Social Security benefits and other retirement accounts.
I'd recommend that you talk to a financial advisor with a larger firm, such as Morgan-Stanley or Lehman Brothers, who can help you set up short term, mid-term and long term plans to meet your goals. Yes, there is a cost associated with using a financial advisor but it's often times well worth the money; they can really help you build wealth over time. Most importantly, a financial advisor will help you understand how to leverage your investments.
In terms of a home purchase, most people these days start off buying smaller homes and "buy up" over time, moving the gained equity in their home into the next, and so on. It used to be that people bought one house and lived there their entire lives, but society has changed and people are much more open to moving jobs and into new areas of the country. One important thing to remember is that a home, even if it doubles in value over 5 years, is not something you should EVER borrow against unless your income can support it. Home equity is your security blanket, just like the TSP is a security blanket for your elderly years.
For military people home purchase can be a big gamble depending upon when and where you purchased a home. In terms of how it fits into the Coast Guard, you should buy in a location where there is a chance that you can pull at least two tours in the same area, such as the Norfolk area or Alameda. Norfolk is by far a much less expensive place to live. Try to plan your career accordingly to help yourself build wealth.
