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If you're like the 700,000 military service members who are reassigned to new locations each year, you shell out an average of $1,725 for non-reimbursable expenses.
When you combine moving costs with the difficulty of uprooting your life every few years, relocations can take a big toll. While some moving hassles are unavoidable, you can ease the financial pain of PCSing with a little advance planning. Consider following this timeline for your next move.
What to do now: Avoid budget blues
Whether your move is days or weeks away, develop a moving budget in advance to keep your finances on track and avoid last-minute costs.
- Find out exactly what the military will cover and what costs fall on you. You can visit your family center for more information.
- Budget for shipping charges, temporary housing expenses, and start-up fees for utilities.
- Make a list of things you'll have to buy when you move in and estimate those costs.
- Use this budget to determine how much you should save for your next move.
What to do before you leave: Prevent moving mishaps
Some moving horror stories result from damaged or lost property. So it's critical to have the right levels of insurance before you PCS. In the case of a moving mishap, insurance can mean the difference between disappointment and financial disaster.
- Find out how much of your personal property the government movers will insure. If it's not enough to provide full protection, a temporary renters insurance policy could be an affordable way to cover the difference.
- If you're shipping a vehicle, review your auto insurance policy to find out if moving-related damages are covered. If they're not, ask your insurer about purchasing shipment coverage.
- Put a plan in place to track your moving expenses. Unreimbursed moving expenses can be an income tax deduction.
Two Financial Moves to Make Before Heading Overseas
- Many countries don't allow foreigners to open new accounts or make new investments with U.S.-based financial services companies. So open your U.S.-based bank and investment accounts, and set up periodic investment plans before you go.
- Many phones in Europe, including those on U.S. bases, will not allow toll-free calls to the U.S. So be sure to establish an Internet bank account and conduct your overseas business online.
Managing Your Move Online
- Log on to usaa.com to order a free PCS guide.
- The United States Postal Service offers a change of address and a moving guide at usps.com.
- Check out buddingfamily.com for tips on moving with children.
- Visit milspouse.org for information on schools, cost-of-living comparisons, and other relocation resources.
What to do after you arrive: Fine-tune your finances
Once you settle into your new place, consider fine-tuning your finances to make your next move easier. The stop-and-go that comes with a PCS -- stopping everything and starting over again in a new area -- can be a shocker to your finances. Military members can find some relief by working with companies that "move with you" and serve your needs wherever you go.
- Consider using online banking so you don't have to worry if there's a branch bank near your new home. You can also set up automatic bill payments to make your life easier during future transitions.
- Choose an insurance company that offers coverage in all 50 states and abroad, so you don't have to change providers with every move.
- Open a separate savings account and contribute enough each month to ease the cash crunch before your next move.
- Set up automatic transfers for investment accounts to ensure your savings habits won't slip.
With the right preparations, your next PCS could be financially painless -- leaving a surplus in your cash supply instead of draining it.
Money Savers: Servicemember Benefits
Some basic PCS benefits that may apply to you include:
- Advance Basic Pay -- allows you to take an interest-free loan of up to three months' of basic pay in advance.
- Advance Basic Allowance, Housing (BAH) -- offers an advance on monthly pay that helps you take care of off-base rental housing.
- Dislocation Allowance (DLA) -- partially reimburses a member, with or without dependents, for moving expenses.
- Monetary Allowance in Lieu of Transportation (MALT) -- pays you and/or your family for mileage when driving to your new duty station.
- Per Diem Allowance -- pays for your lodging and meal expenses.
- Temporary Lodging Expense (TLE) -- reimburses you and your family for the cost of meals and lodging incurred when temporary housing is needed.
Visit the relocation manager in your family center for more information on your benefits.
For more information, or to order a free PCS guide, visit usaa.com.
Joseph "J.J." Montanaro is a CERTIFIED FINANCIAL PLANNER(tm) practitioner with USAA Financial Planning Services, one of the USAA family of companies. Montanaro served in the U.S. Army for six years on active duty during which he PCSed four times. He recently retired as a Lieutenant Colonel in the U.S. Army Reserve.
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