Moving is a part of military life, and it’s not unusual for service members to be relocated every two to three years.
“I moved nine times in 19 years,” says Carlos Perez, assistant secretary with the American Armed Forces Mutual Aid Association. Perez, a retired colonel and 26-year veteran of the Army, says the summer months are among the busiest when it comes to military moves. “A lot of the Department of Defense service members move in the summertime because the kids are out of school, and it’s an easy transition.”
[Read: A Comprehensive Guide to Saving on Moving.]
Jim Brown, a real estate agent with Redfin and army veteran, says his company is also seeing an uptick in military members moving from overseas to a permanent duty station. “What we’re seeing in the industry is a large emphasis on moves from the downsizing of the active forces,” he says.
Regardless of the reason, if your military family will be moving this year, here are seven ways to save money.
1. Pick the right living arrangement. The most important money-saving decision a military member can make happens before the first box is even packed. That decision is whether to reside on-post or off-post. Both have their benefits, Perez says, and the better financial choice may depend upon your location and family size among other factors.
Living on-post may mean you get more house than what you could otherwise afford. In addition, there is no commute and better access to on-base perks such as commissaries, medical centers and recreation facilities.
However, living off-post allows military members to select their own neighborhoods and schools. Plus, frugal families may find they come out ahead if they can keep their living expenses low. “If you’re able to come in under the average [cost of housing], you get to keep the savings,” Perez says.
For families electing to live off-post, doing thorough research is key to avoid any unpleasant surprises upon arrival. “We have the capability of doing a video tour with an iPad and FaceTime,” Brown says. This technology has allowed some military members to complete the entire home buying process while still stationed overseas.
2. Carefully consider what to move. The less you have to move, the cheaper it will cost. “Since military families move about every 2.5 years, if you haven’t used the items in your most recent home, you probably don’t need them anymore,” says Ross Sapir, founder and CEO of Roadway Moving in New York City.
“Instead of shipping it to your new location, just donate it,” says Andrea Marsden, an assistant professor at Beacon College in Leesburg, Florida and former Army surgical nurse. “And by donating it, you can write it off on your taxes.”
While selling or donating those items are two options, storing them is another. Some companies, such as Roadway Moving, will store items indefinitely, a service that may make sense for sentimental, seasonal or other items that aren’t needed now, but will be in the future. “Rather than constantly paying to relocate items, families can save money by putting things in storage,” Ross says.
3. Understand your military benefits. The military offers its members several allowances to cover the cost of relocation. These must be requested and include a dislocation allowance, per diems for mileage and lodging and a temporary lodging expense allowance.
Not all military members receive the same allowance. It can vary depending upon a person’s rank and family size. There are also limits to what the military will transport for its members. “Be sure to ask about the weight allowance and how much extra it will cost if you go over the allowance,” Marsden says.
[Read: 6 Smart Must-Do’s Before Moving Out of Your Apartment.]
4. Ask for your moving allowance and pay in advance. Military members often overlook the option to receive their allowance and pay in advance of a move, Perez says. “You may eventually get it, but you won’t have it when you need it,” he says. “[An advance] provides a well-needed float.”
Typically, the military will advance a month’s worth of pay for a family that is moving. That money must be paid back over the next 12 months, but there is no interest attached to the payments.
5. Keep receipts for everything. Regardless of whether you get the money in advance, keep receipts for all expenses related to moving. While the dislocation allowance is a flat amount, the financial office may need to see receipts or other documentation for items such as lodging expenses. Beyond military allowances, receipts will be needed for unreimbursed expenses to be deducted on income tax forms.
6. Use professionals who understand moving and military needs. The Department of Defense will move household items, or military members can choose to make their own arrangements. Those who opt for professional movers should look for a company with a strong reputation and a reasonable price. “It is the job of the moving companies to know exactly what to do for a seamless experience,” Sapir says.
“Also, don’t be afraid to negotiate,” Marsden says. “I saved about $1,500 on my move by telling [the movers] that another company would ship my stuff for less.”
When it comes to getting a mortgage, home buyers may be able to receive a refund on their closing costs by using a company such as USAA or Redfin. In addition, some mortgage brokers specialize in serving military members and can direct people to lower cost loans. “As a veteran and a user of the VA loan program, I’ve seen the professionalism and caliber of those administering these loans increase tremendously [in recent years],” Brown says.
7. Write off unreimbursed expenses and donations. Despite the military allowances, service members may incur out-of-pocket expenses during a move. Anything in excess of the allowances may be deductible on the following year’s income tax forms. In addition, the value of items donated to an eligible non-profit can also be included as a part of itemized deductions.
[Read: 7 Tax Tips for Military Members.]
Moving comes with the territory when you enlist in the military. However, with a little planning and the help of military relocation allowances, a change of scenery doesn’t have to be a drain on your wallet.
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