When it comes to your next military move or Permanent Change of Station (PCS) will you make money, lose money or break even? This is a very common question that comes up in military circles.
Whether you're planning your first PCS or you're a seasoned veteran, here are three tips for saving money during this transition period.
1. Start a PCS fund.
Service members usually need extra savings on hand to pay for potential out-of-pocket expenses that often happen during the military move. USAA recommends setting aside at least $2,000 plus whatever is required for your unique situation.
This extra money helps covers items the military likely won't move like an RV, large boat or expenses associated with transporting your pets overseas. Plan for these expenses ahead of time to avoid resorting to a credit card on your emergency fund.
2. Avoid common PCS mistakes.
Be aware of your per diem.
While a PCS might feel like a well-earned opportunity to treat yourself, staying in five-star hotels and eating steak every night will quickly break the bank. Carefully plan your travel and eat modest meals to stay within your per diem.
Pro tip: Choose a hotel that provides complimentary breakfast and fill a cooler with drinks and sandwiches to cut back on costs while traveling.
Watch out for non-reimbursable expenses.
To limit your out-of-pocket costs, keep non-reimbursable expenses to a minimum. Some of these include entertainment, moving pets or vehicles not covered by the military.
Keep all receipts.
Even if you won't be reimbursed for an expense, you may be able to deduct it on your income tax return if you have the receipt.
Lighten your load.
Exceeding your housing weight allowance will cost you. Make sure the movers don't count your professional gear as household goods. If you think that you might go over your limit, have a yard sale or donate rarely used items to a local charity.
3. Use the personally procured move and dislocation allowance to your advantage.
If you do a partial personally procured move, the military will pay you to transport things you might carry with you anyway. I packed financial records, jewelry and things my family would need immediately in the new location in my car. Since I wanted them with me anyway to keep them safe, I might as well have the military pay me to move them. If you're unsure on the difference between a full military move and a personally procured move, check out this video.
Also, spend your dislocation allowance, or DLA, smartly. DLA varies by rank and if the military member has dependents. But it's generally a few thousand dollars and can help in your transition if used wisely. If you splurge in your new-to-you home, your purchases could easily exceed your DLA and come out of your pocket. But if you're careful, you might be able to save some of the DLA for your other financial goals.
By following these tips, you can help avoid going into debt during a PCS and maybe even save a bit of money for future expenses. Put any money you save toward your emergency or PCS fund or other financial goal.
Make your next PCS move successful.
Visit our PCS resource page for more information.