PCS moves, inevitably, cost military families money.
Yes, the military pays to ship your household goods, your car and, eventually, will reimburse you those hotel charges.
But what about eating in restaurants for a week? What about replacing many of the non-moveable items like spices, food and cleaning supplies.
And for spouses who work civilian jobs and are accustomed to living in a two paycheck household, a PCS move can feel like a kick in the gut as you downsize from two incomes to one. And there's no guarantee you will find a job or the same income in your new location.
The only way to handle a significant loss in income, is to be prepared.
USAA financial planner, Joseph Montanaro, says some planning and a lot of discipline can soften the impact when those future expenses become a reality or when one spouse is suddenly unemployed due to a move.
“People tend to spend what comes in,” Montanaro says. “Two incomes can often mean more spending, but the goal should be to create a lifestyle where you aren’t counting on both salaries.”
The first step is to know where your money goes each paycheck. To do that effectively, budgeting and tracking your spending is essential.
“You can use an app, a spreadsheet or a pocket diary, but the key is to figure out what allows you to stay on top of your spending,” he says. “Some people pull cash out and separate it out into envelopes for specific purposes. Do whatever works best for you.”
He also recommends that everyone set up an emergency fund. It could be used during a PCS, for a vacation or to take care of other special financial needs that pop up in your future.
“If money is a subject that makes you just go to sleep, automate it,” Montanaro says. “Set up separate accounts and have one check, or a big part of one, go into an account that isn’t touched on a regular basis. Do whatever you have to do to ensure you’re not using all the money that comes in.”
The automated savings account is a great way to prepare for something you know, or don’t know, is on the financial horizon.
“It all comes down to the grunt work of tracking your money and cutting out or cutting back,” Montanaro says. “ PCSing is a part of military life, you’ve just got to be ready. You knew it was coming, you just might not have known when.”
In addition to saving money in preparation for a PCS, USAA advises families to know their military benefits in regards to per diem funds you may receive, lodging expenses and advanced pay. Unreimbursed moving expenses may also be tax deductible during your move, so keep your receipts. USAA also offers reduced credit card interest rates for up to one year upon a PCS move.
Unfortunately, military life also involves unexpected life changes, like injuries. A spouse may have to leave their job to care for their injured servicemember.
Montanaro notes that the same type of preparation that could help smooth a PCS move could be beneficial if tragedy befalls a military family.
“When a servicemember is injured it’s obviously a big deal for the entire family. It’s also another situation where having a robust emergency fund can pay big dividends. It can help the family focus on what’s important without having to worry about money,” he says.
He encourages families to use the financial planning tools and calculators they have available at USAA and to start preparing and saving as early as they can for what they know is coming, as well as for the unknown.
“You’d much rather do it sooner than later,” he says. “By using a proactive approach, you can avoid the headache that comes with being financially unprepared.”
Want more information? Check these helpful sites at USAA:
https://www.usaa.com/inet/pages/advice_saving_investing_planners_and_calculators_main
