Before we discuss how to pay for aviation training, let’s evaluate WHY you want to pay for the training.
The “why” will drive “how to” pay for training.
There are three overarching reasons to pursue aviation training:
- The first is because it’s fun and something you’ve always wanted to do.
- The second is for professional reasons; you want to get paid.
- The third is because it makes sense from a business perspective; it’s cheaper for you to be the pilot.
Each of these reasons requires a different approach. All of them, however, require financial knowledge and responsibility before pursing training. We cannot discuss paying for expensive aviation training without understanding the fundamentals of personal finance.
Note: I am not a financial professional. I have listened to tons of financial podcasts and read more financial books than I can count, but this does not make me qualified to give you financial advice under the law. You are responsible for your finances, not me.
With that said, this article is full of financial resources and practices to help you figure out the “how-to” specifically for general aviation flying.
I will write another article on how to pay for commercial training with the intent to get hired professionally in a different article, although, this will have a lot of the same information.
Let’s tackle the first type of flying: hobby or general aviation.
How to pay for general aviation flying
Aviation makes zero financial sense for someone who just loves to fly. It’s an absolute drain on your finances.
But who cares! Flying is flying! You only live once! Why not do the things you love! Right??
I agree wholeheartedly you should pursue your dream of flying, but ONLY if your financial house is in order.
Recreational pilots, in my opinion, should only pay for training in two ways: pay for it in cash, or get an aviation scholarship.
Private licenses cost about $10,000. A recreational license is about $8,000, and a sport ticket is about $5,000. Check out Lessons.com for more specific numbers.
I highly recommend you have almost the entire amount before you start training.
Aviation training is arduous. New students sabotage themselves with insufficient cash and, as a result, go weeks between flights. Progress is slower, and subsequently, training costs more.
So, do yourself a huge favor and set aside $10,000 before you start your training.
Wait, I can’t save $10,000! It will take too long to save that much! I’ll just take out a loan!
No. No. No! A loan on a recreational sport is foolish. There is no return on your investment, and you put yourself at risk by going into debt. What if you don’t finish your training and you owe $5,000 and you still don’t have a license?
Ugh, I know, I’m such a buzz kill! You are so excited to start training, and I just told you to save $10,000.
I’m actually not telling you to save that much; I’m telling you to save way more than that.
Here is the ugly truth: It’s foolish to take on an expensive hobby unless you can afford it.
Not a lot of people can afford it, in my opinion, because there are things you need to take care of before you start training.
However, if you are able to get your finances in order, then you can pursue your dream stress-free. And that is a beautiful thing!
Let’s get to the list of financial must-haves prior to training:
Sufficiently fund your retirement accounts for your goals and age.
If you have a 401k through your employer, this means more than just the employer match (which is usually around 3%).
When I say “fully” fund, I mean saving enough for your target retirement age based on your spending.
How do you know how much you need in retirement savings? The general rule of thumb is 25 times your yearly expenses. This will give you a safe withdrawal rate of 4%.
Let’s do an example.
Let’s say you spend, on average, $5,000 a month, including taxes. That’s $60,000 a year. If you use the 4% rule (or multiply that number by 25). $60,000 times 25 is $1,500,000 in “retirement” savings.
Note: The 4% rule is from the Trinity Study which simply states even retiring in the worst economic downturns like the one we’re in now, if you only pull out 4% of your portfolio in retirement a year, you won’t run out of money.
If you qualify for Social security, and your SSA statement says you are eligible for $2,000 a month, you only need $36,000 a year from your investments (60k-24k=36k). $36,000 times 25 is only $900,000 in the “retirement” savings.
I assumed a 30-year-old has $0 in savings. If he wants to retire at 65, he will need $900,000 in a retirement account. That amount combined with Social Security will get him to $60K a year at a 4% withdraw rate.
If he puts away $800 a month at a 5% rate of return, he will be able to retire right at 65. With company matching, the $800 might be even lower.
You must figure out your number before you start flying! The amount will change over time, but for now, it’s a good starting point.
In this example, if Mr. Student Pilot can’t save $800 a month for retirement, he shouldn’t be flying.
This is just an example. Maybe your eyes glazed over, and I lost you. It doesn’t matter. If that’s too complicated, just multiply your annual spending by 25, and that’s how much you need in retirement savings.
Then use a compounding interest calculator like Dave Ramsay’s and figure out how much you need to put away every month.
A word of warning about his calculator: don’t use 12% as an average return rate mentioned below the box for “interest rate.” That rate of return is ludicrous for so many reasons, but I won’t go there. Five percent is a good starting point, and if you are really aggressive with a 90/10 portfolio maybe go up to 8%. Most people can’t stomach a 90% stock allocation over the long run, though.
The next item student pilots need to consider is before they save for training is:
Fully fund an emergency savings account.
Having cash set aside for emergencies is a must before you start saving for training:
Most advisors recommend 3-6 months of monthly expenses in an emergency fund.
I find three months uncomfortable, six feels a bit better, but since the Coronavirus, I’ve been leaning more towards 12 months. You decide, just have a plan!
If you do not have any financial runway in the form of accessible cash, you have NO business pursuing aviation training.
Emergency expenses typically aren’t as high as actual expenses because if you lost your job for six months, you’d cut out restaurants, and cable, and the fifteen different entertainment subscriptions you use.
You should also have a definition of “emergency.” An emergency is not that you need to take money out for groceries because you just spend $75 at the movies.
Typically this is for a job loss, a major unexpected house repair, unexpected medical bills, etc.
Some people keep this money at a completely different bank in a high-interest yield savings account. Don’t put it in the stock market. It needs to be obnoxiously safe.
The third item:
No consumer debt (i.e., credit card)
You have NO business pursuing any type of aviation training if you carry credit card debt.
Not only that, if you carry a credit card balance (Instead of paying the full amount every month), you are also overspending.
If this is you, no judgment. We don’t teach our children how to handle money. You will have to educate yourself.
Start with these books:
No student loans
Many people believe they will never be free of student loans, which is hugely depressing. Many people don’t bother to pay it off because of the low-interest rate.
But, did you know, this is the ONLY type of loan you cannot shed during bankruptcy? Not only that, if your loans are private, they are not forgiven upon your death.
What are you going to do when the economy goes into recession (like it just did), and you lose your job? Are you going to wait for a government handout? Sure, the CARES act temporarily reduced student loan interest rates, but only for federal loans, not private loans. The bailout isn’t going to last.
You will still have to pay for your student loans (eventually). What’s worse is some states will go after your professional licenses if you default.
Several states allow professional and vocational boards to refuse to certify, certify with restrictions, suspend or revoke a member’s professional or vocational license and, in some cases, impose a fine when a person defaults on student loans. In other words, you could lose your job.
If you are not paying extra on your loans and instead are spending the money on aviation, you should think about the risk associated with that decision.
Optional: fund child’s 529 plan
You know how they say to put your own oxygen mask on before you assist other people?
Take care of your own retirement before you take care of your child’s college education.
I would go a step further and say, take care of your dream of flying before your kid’s education.
I realize though if you are reading this, you are most likely a man and are under an enormous amount of societal pressure to “provide” for your family.
Society unfortunately narrowly equates “provide” as “money.”
As a result, we get a lot of absentee Dads who work hard to bring in money because that’s what they are supposed to do.
Sometimes, thought “providing” means being a happy, present, and fulfilled person.
Maybe seeing Dad happy is better than having a fully funded 529 plan.
So, those are the major thing you should have in order before you save for training. The great thing is that once you have your financial house in order, feel free to spend your money on anything you want!
What are some ways to save for aviation training?
Use a budgeting app to help save for training
I personally love You Need a Budget or YNAB. This app is for people who hate budgeting or have failed at it in the past.
I can’t say enough about this app. It ONLY lets you budget money you have right now in your account. It also enables you to move money between different categories instantly. Overspend on going out? No problem! Move it from the “books” or “entertainment” category to cover it.
But the best part is the ability to assign excess cash into an “aviation” category.
If you don’t want to use YNAB (it’s $89 a year, but worth every penny), then try Mint, Personal Captial, or just use a Google Sheet.
Get a scholarship
Carl Valeri from the Aviation Careers Podcast has an excellent one-stop-shop scholarship guide for $10.
Check out this website: Aerospace Scholarships Guide which explains how to use it.
I’m not even going to mention other ways to find scholarships. Buy the guide.
Duh! Except this isn’t so intuitive.
You can save money by cutting Neflix, or changing your cell phone carrier, but those are a drop in the bucket compared to the “big three.”
The quickest way to get to your aviation dream is to cut spending in the three biggest categories:
- Transportation: if you own a $30,000 car and you sell it and buy yourself a $10,000 car, you just paid for your aviation training twice over.
- Housing: if you own a home, can you “house hack?” Which simply means get a roommate. Imagine if you had a roommate who paid you $500 a month. You just found a way to pay for your monthly aviation habit. Get creative. Move somewhere cheaper.
- Food: shop at a different store (this can make a huge difference even when the products are exactly the same!). Cut back on your going-out or take-out spending. Start cooking at home. Even one night a week will make a difference.
I realize there are tons of objections to why people don’t cut in the big three categories.
Just ask yourself: “how much do I really want to fly?” Maybe downsizing to a smaller home, or moving to another state will get you your dreams.
Think outside the box.
Make More Money
I’m not saying go be an Uber driver, although that is an option. There are many ways to make more money and here are a few:
- Ask for a raise
- Start a side hustle. Here is an article from Nerd Wallet: 26 Legit Ways to Make Money (pay attention to #26, drone pilots!)
- Note: Check out Chris Guillebeau. He’s cornered the market on side hustle stories and his podcast will provide you with a thousand ideas.
- Raise rents if you are a landlord, if you haven’ raised rents in 10 years, maybe it’s time!
- House Hack
- Move to a state with lower taxes
These are just a few ideas. The options are endless. Where there’s a will, there’s a way!
How much does it cost to stay proficient?
Now that you paid for training, do you have enough money to keep flying?
Many people get caught up in paying for training without analyzing whether they will have enough money to stay proficient and keep flying.
Pilots should plan for a minimum of one flight a month to maintain the most basic proficiency.
Note: See why I think you should fly more than an hour in this article: Three Ways to Overcome Pilot Anxiety
Don’t forget to budget for more than just monthly flight time.
I’ve listed some additional aviation expenses you should consider. Some are one-time purchases and others are recurring. Cost-per-flight-hour will depend on your local FBO as well as instructor pricing.
Common aviation expenses:
- One hour of flight time (if you rent, not own) a month (at least!)
- FAA Medical (you might need an EKG depending on your age)
- Bi-annual review with a flight instructor
- Software subscriptions like Foreflight ($79 or $99 a year not including the iPad)
- Emergency gear like a medical bag, tourniquet, emergency aviation radio
- Spot tracker for flight tracking
- Headset (two if you want someone to fly with you) My personal favorite is the DC Pro X.
It could cost you an average of $500 a month to pursue this hobby safely, more if you own a plane.
This is where YNAB or You Need a Budget really shines. You can create an aviation category and test out whether you have enough money every month. Put aside $300 a month. If you keep taking money back from the aviation category, then you probably can’t afford to fly or you need to reevaluate your other spending.
I’m sorry if I shattered your aviation dream. You wanted an article on how to pay for training, and I just pointed out why you can’t.
The goal of this article is to help you pursue your goal without exposing yourself to financial risk.
But do not despair! You can put yourself on a solid financial footing; it might just take a while.
Here are some of my favorite podcasts and books to help you understand finances and help you plan for your aviation dreams.
- The Simple Path to Wealth by JL Collins
- Your Money or Your Life
- How Much Can I Spend in Retirement?
- YNAB: You Need a Budget (mobile and desktop app)
- Mr. Money Mustache: The Shockingly Simple Math to Early Retirement
- Jill on Money Podcast and her book The Dumb Things Smart People do With Their Money
- Paul Pant: Afford Anything (great podcast!)
- Choose FI (great podcast!)
Good luck, and I hope this article helps you pursue your aviation dream responsibly and free of financial stress.
Affiliate Disclaimer: some of the links are Amazon affiliate links which means I get a small cut if you use my affiliate link to buy something. It doesn’t cost you anything, it comes out of Amazon’s pocket and it helps me run this website!
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