Members of the military face several financial challenges when preparing to move to a new state or country. There’s never a perfect time to get Permanent Change of Station (PCS) orders, but when you get them, it’s a good time to start preparing your finances for what’s ahead. Here are some ways you can financially prepare for a military move.
Budget to Financially Prepare for a Military Move
If you’re not currently budgeting, developing a budget is the first step you should take to get your money in order. It’s a helpful tool for organizing your finances, tracking expenses, and getting a clear picture of your financial state.
Budgeting before a move can be tricky because you won’t know all of your expenses. You can start by writing out a budget with your current income and expenses to have a baseline. Once that’s complete, try to fill in what you think your future income and expenses will be.
Don’t forget to include changes like an increase or decrease in your Basic Allowance for Housing (BAH). If you receive additional pay, such as Separation Pay, that needs to be in the budget as well. And don’t forget the things that don’t happen every month, like new tires and birthdays.
Steps to Create a Budget
Here are the steps to begin creating your budget.
- Determine your monthly income after taxes.
- List your monthly expenses, including fixed expenses (rent/mortgage, car payment, insurance, etc.) and variable expenses (groceries, entertainment, etc.).
- Categorize your expenses into groups like housing, transportation, food, entertainment, and holidays.
- Determine which expenses are essential, like housing and food, and which are discretionary, like entertainment and dining out.
- Calculate your available cash by subtracting your expenses from your income.
- Make adjustments if your budget comes up in the negative by reducing expenses.
- Track your spending to make sure you’re sticking to your budget
- Review and revise your budget regularly to ensure it’s still working for you and to reflect changes in your income or expenses.
Understanding What is Paid For in a Military Move
The military offers relocation and entitlements benefits to assist with moving costs. They’re supposed to ease the financial burden of relocating to a new duty location. You should review these benefits to ensure you understand what’s covered before you PCS to know what to budget for.
The military will provide transportation from your current duty station to your new duty station. This may include commercial air travel, government-provided transportation, or a Monetary Allowance in Lieu of Transportation (MALT).
On your PCS, you’ll receive per diem payments to cover the cost of meals and incidentals during the move. The per diem rate varies depending on your travel location and the length of your travel.
Dislocation Allowance (DLA) is a one-time payment meant to reimburse you for some moving expenses. The amount varies depending on rank, dependents, and the distance of the move.
Temporary Lodging Expense
You may be eligible for Temporary Lodging Expense (TLE) to cover the cost of lodging while you’re waiting for permanent housing to become available.
Household Goods Shipment
The military will arrange to transport your household goods (HHG) to your new base. You may also be eligible for reimbursement for the cost of moving your vehicle.
Seek Housing Options in Your Budget
Housing costs can make or break your budget. They vary significantly depending on your location. Be sure to research housing options in your new city to determine the best option for your needs, budget and BAH.
If you need help, start with your installation housing office. They can provide information for on or off-base housing options. Plus they know the local area and may have resources to help you find affordable rental properties.
Build an Emergency Fund
An emergency fund is essential for unexpected expenses that will come up during your move. It’s Murphy’s Law. Things like car repairs or pet bills tend to come up on a PCS. Aim to save at least three to six months’ worth of living expenses before you move to give yourself a financial buffer.
Make Military Spouse Employment Plan
Two incomes are always better for a budget than one. A PCS can negatively impact your budget if you depend on the military spouse’s income for your budget, especially for something like a car payment. Start employment planning early to lessen the impact on your finances.
Update your resume and LinkedIn to begin looking for a new job. You can also consider remote work or freelancing to continue earning money during the move. You can also leverage military spouse employment resources to find a job ASAP.
Minimize Debt and Expenses
At any time, debt is a drag on your budget, but trying to pay down as much of your debt as possible before your PCS can give you more flexibility during the transition from one place to the next. Plus, reducing your expenses ahead of the move can help you build up your savings.
Notify Creditors and Companies
Updating your creditors, insurance providers, and banks of your upcoming move to prevent any issues with payments or access to accounts. Your new location may have higher or lower insurance rates, which is important for your budget.
There are many things to keep track of during a military move. Setting your bills to be paid automatically will ensure they’re paid on time and in full, even through the chaos of your PCS. It also gives you time to get set up in your new home or apartment and change your address.
Check Credit Report
Before and after you move, check your credit report. You want to be aware of any debt that may have gotten lost in the shuffle of another PCS so you can make payments. You’ll want to recheck it once you’re settled in your new place to ensure no errors, which, if there were, could affect credit scores.
Moving is a reality for the military community. A PCS has many challenges, but finances don’t have to be one. Taking steps to prepare your life and finances ahead of time can help make a smoother transition to a new location without negatively impacting your money. Following these steps, you and your family can prepare for a successful military move.