The PCS Budget Reset

February 15, 2012 | Kate Horrell

Military life – it has its pros and cons.  One great big pro is the opportunity to reset your budget each time you move.  For most people, housing is their biggest monthly expense, followed by autos and food (they vary between 2nd and 3rd place.)  In addition, these are relatively fixed expenses.  It is hard to decrease these costs, because cars are usually bought or leased, and you can’t just up and move houses whenever you want.  PCSing is the perfect time to make choices on these big ticket items.  As my family looks at our next move, the price of housing and the price of transportation factor high into my research.

Obviously, within housing, there are a few issues.  The first issue is whether to live on base, to rent a house in town, or to buy a house.  There is no right answer, though most experts suggest that military families think long and hard before buying.  Regardless of what sort of housing situation you choose, housing is a great place to minimize costs.  Choosing a slightly less expensive rent can have long term results.  Even $100 per month, if saved diligently with modest interest, can net $4,000 in savings over a three year tour.

Utility bills can be a large expense, as well.  There is only so much you can do to choose a house with lower energy expenses, but it is pretty obvious that the 3,200 square foot McMansion with a two story family room might be more expensive to heat than the 2,000 house with standard ceilings.  Also, you can be pretty sure that newer windows are likely to keep temperatures more steady than 20 year old, builder grade windows.

We are moving to an area where the houses tend to be newer and larger.  I like the idea of newer, because it probably has decent insulation and a reasonably efficient heating and air conditioning system.  I’m not a huge fan of larger.  We live in a pretty big house now and everyone basically hangs out in the same two rooms most of the time.  To me, more space is just more room to fill up with stuff that we don’t need.  I’m torn – I want to have a dedicated guest bedroom so the grandparents feel always welcome, and it would be ideal if each child could have their own room, but then we’d have a six bedroom house, and that is just ridiculous.  Finding the balance between wants, needs, and what’s available is always a challenge.

The other place that PCSing can let you make a big impact is on your transportation expenses.  For starters, car sales and purchases often happen together with PCS moves.   Not only do you have to consider the cost of the car itself, but also the gas mileage and the maintenance expenses.  Then there are the costs involved with getting from your new home to your new job:  gas and tolls.

In our case, we’re moving from overseas, so we’ll be selling our European car before we leave and buying a new US car when we get there.  There are so many choice and variables.  Should we buy a much older car that might need more repairs?  A newer car, or even a new car?  (Not likely it will be brand new.)  Should we be more concerned with gas mileage or purchase price?  What about the number of seats?  For our primary car, number of seats is important.  How much should that be a factor in our secondary car?  And then there is insurance – is one location significantly more or less expensive?  How about one car vs. another car?  My mind spins just thinking about it.  In some locations, your housing choices can make the difference between needing one or two cars for a family.  That is a huge difference in overall costs!

All these decisions are huge in the sense that they will impact our budget each and every month.  Housing and transportation together can make or break your budget.  Choosing the more expensive options in these two categories can add hundreds or even thousands of dollars to your monthly fixed expenses.  Less expensive choices in housing and transportation can free up money to accomplish other goals and leave money for fun, too.

Comments

  1. Katie H. says:

    I agree with all of this, but I also feel you will drive yourself insane pondering every tiny little detail. I'd rather just sweat the really big important stuff and leave the little stuff for as we go. Keeps life interesting and has worked out pretty well for us so far.

  2. Frank Mc says:

    I agree only partially with this article. When planning your personal budget you should not factor in housing costs other than renter's insurance and telephone/cable tv/internet services as these items will have to be paid for out of the military member's base salary. The military provides a special pay for housing (BAH) which is meant to cover rental and utility fees or mortgage costs which means you need to set up a separate housing budget. If one knows the amount of the BAH to be received than they have full control over the size house they can afford to rent/buy to include projected costs of utilities/homeowners insurance. If one plans on renting/purchasing outside of the allotted BAH then one needs to consider this factor when planning a personal budget. Understand that BAH is not meant for building up a savings.

  3. Len says:

    I say convert the military to the same pay system as civil service…No more tax free pay for housing and subsistance, make them pay for medical insurance as well…They will still survive and it will still be a good paying job…

  4. Mario says:

    “We live in a pretty big house now and everyone basically hangs out in the same two rooms most of the time. To me, more space is just more room to fill up with stuff that we don’t need. ”

    We recently moved and this is precisely what we’ve found to be true. More space does not mean more enjoyment. Good perspective on this and wise to think the details through before your move.