PCS Impact Q&A: Dollars and Cents for Your Next PCS
by Lizann Lightfoot - September 16th, 2020
Guest: Nick Stone, a Navy spouse and financial advisor for about 10 years. I love working with military families because there is always more to learn about money.
DOD Updates: Let’s review the timeline for claims– it is now 180 days for anyone packed up May 15th or later. If it was before that date, it was only 75 days to file a claim. If you are told you have less time, refer them to the Move.mil Claims tab or the Tender of Service. Make sure you keep all your damaged items until your payment is settled, because they have salvage rights. So keep everything, and they should pick up within 30 days of settlement.
How can a dual income military family prepare for a loss of income before and after a PCS?
It’s always important to have open communication with your spouse about money and feelings about money. Make sure you are on the same page. Right alongside that is saving: Save Save Save! Whether it’s a dollar a day or much more, put away some for a rainy day and you’ll never be sad that you saved. Maybe it goes to the PCS move, or maybe it is available for something else. If you are losing the spouse income for a certain amount of time, sit down and discuss the budget together with the loss of income so that you can get on the same page and make it work. Communication is key.
What are some of the easiest ways someone can save money? Can you do it without feeling the pinch and missing out on fun things?
Yes! I do it as an automatic transfer with my company, so a certain dollar amount always goes to a separate bank account: out of sight, out of mind. I don’t check it very often, so after a while I’m always pleasantly surprised how much has built up. This could be the money you’re saving for a PCS, or for the fun event at the end of the month, etc. Psychologically, we look at our checking account and think that’s how much money we have. But it’s important to have additional money saved away that you aren’t looking at so regularly. Then you won’t even miss it because you’ll adapt to the amount that is hitting your account each month. Pay yourself first.
There’s a delicate balance to using credit and loans vs. the savings that you have. Ultimately there will be large expenses like a house or a car, so you will need a loan to pay off some debts. But something like credit card debt can be paid down first with savings so you aren’t paying it out several times.
What financial pitfalls should military families watch out for?
Predatory lending is something that military families really need to avoid 100%. At payday loan places, you end up paying up to 1,000% interest! It’s truly predatory. You should go to the base first and see what you can plan with a financial counselor or get a loan from the Relief Society rather than something you may never get out from. If it looks like a really great deal, there is probably a catch. If it seems too good to be true, it probably is!
Focus on necessary things: an auto loan could be a necessary part of a budget. But just because you qualify for a certain amount, you don’t need to go up to that full amount! Maybe in your budget you can only really afford half that amount. The lender person just wants to close the loan. They don’t care how much it will stretch you. If you need a second opinion, call a friend or check with someone else who can give you good feedback. Your service member should not be afraid to check with their chain of command to see if you are getting a reasonable rate and making sure they won’t be taken advantage of.
Remember that the military Relief Societies can all give you zero interest loans and put you on a reasonable payment plan, which is a much better option than a payday loan. Those agencies actually want to help you and their mission is for you to succeed.
What are some easy ways military families can make our dollars stretch more without eating ramen for dinner?
Pre-COVID, sometimes stretching the money may mean doing potlucks or inviting neighbors to share dinners and meals together. Then you can take leftovers home and buy fewer groceries. Be mindful of sales at the grocery store: use the cheaper cuts of meat that cook for a long time, so you can still eat well and not feel like you are depriving yourself.
In the age of screens, being outside and active is usually free: go to the park, the beach, find free local activities, etc. Now you have to wear a face mask and follow social distancing rules, but it’s still a good way to find cheap or free entertainment.
Social media can be great, especially joining FB groups with local events and activities. Community gardens may be selling discounted fruits and vegetables.
Consider doing “date night in” by ordering food and renting a movie so you don’t have to budget for babysitting. Or get a cheap projector and cast it on a sheet or wall and create a fun outdoor environment where you can gather with friends outdoors and watch a movie together. Technology continues to make things more affordable.
Families get entitlements when we PCS. Sometimes after reimbursing expenses, there may be money left over. What is the smart thing to do with any leftover money?
It’s important to pay yourself and discuss your budget with your spouse. Discuss goals like retirement, large purchases, education plans, kids, etc. If it’s time to update your TV, then it’s ok to make that kind of purchase. But is there a longer time that you could invest it for so it can grow over time? Work with a financial advisor or planner to help you decide where to save it. You don’t want to invest it if you’re going to need it in 12 months, so in that case you need a short-term saving strategy. There are planning tools available on base, or you can give me a call! That money might mean a lot more for you down the road, so make sure you discuss it together and have a plan. PCS is a good time to evaluate how and where you have spent your money before, and where you have overspent. Incorporate your expenses into your new budget, so you can agree on the things that you enjoy and want to spend money on–budget for those treats!
For families with teenagers who want to teach their kids more about money, PCSing can be a good teaching opportunity. What advice can you give about tools, tips, or programs to help military kids become responsible young adults?
Growing up, I didn’t realize how tight our money was, but I had a lot of responsibility and guilt about our family’s situation. Be careful and mindful of the conversations you have with your spouse around kids, because if you are stressed or concerned it can affect kids in a negative way. The larger family conversations can be about how things are going to be different for a while, and modifying expectations.
Incentivizing your kids is important. If they are earning allowance, offer to match whatever they save and put away. It helps reward them for saving and creates a positive experience so they can see their money grow. It teaches good habits, like the way employers will do for adults in regular society.
There are banks that will allow a teenager banking account where they get a debit card and the parent can control that and they don’t have certain overdraft fees. This lets you discuss upcoming events and charges that are coming up, and set them up for success. This lets you practice what you preach and help you all practice financial literacy together.
How can young service members save when they are already living to their full budget and don't have extra money?
Typically there is always a way to save, even if it’s $5 or $25 here and there. Whether it means not having a bottle of wine, or using the military gas station instead of the civilian one closest to your house. If you’re a newborn parent, you may not have much energy and may not be perfect. If you just make it through the month and aren’t saving much, don’t give up and beat yourself up. To be successful, you must stay positive and keep working at it. It’s not impossible, it’s temporary. Your income will eventually increase (your bills may increase too!) but you will get better at it, become more disciplined, and eventually have extra money so it will become easier to save the more you practice. Stay realistic. If you keep getting stuck, ask friends or a financial advisor about what you can do differently. Even in the dark months, it can always get better.
How can people find you, Nick?
Besides driving to San Diego, you can call or email: Nick.Stone@EdwardJones.com. Send me a FB message or any message. I enjoy being able to see and witness what military families are going through, and provide advice and encouragement. My door is always open to military families, if I can help you out or point you in the right direction, know that there is no judgement and it is confidential. Every journey and situation is unique, but a lot of us share commonalities in the military community, so reach out and find out if others are facing similar situations as you. You can get great support and help from other military spouses.
Lizann Lightfoot, the "Seasoned Spouse" is a professional writer and speaker for the military community. After two decades with her service member, her family has been through 7 deployments and 6 PCS moves. Lizann has raised 5 children and published several books for military families. Her most recent book is "Open When: Letters of Encouragement for Military Spouses" published Sept 2021 by Elva Resa. You can find Lizann's articles and resources at SeasonedSpouse.com
