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Making the Most of BAH

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Reading time 4 minutes 24 seconds

Military relocation can be challenging, and moving comes with plenty of expenses. When you have orders for a Permanent Change of Station (PCS), it can feel like there is a sudden pressure to find a safe place to live, provides a sense of community, and gives you everything you want in a home. Adding to the challenge is working within your budget. So how can you ensure you and your family have everything you want in a new home when you PCS?

The key is making the most out of your BAH.

You and your family have a choice in where you live. You can choose military housing rentals “out in town”, or you can choose to live in Public-Private Venture (PPV) housing, sometimes referred to as “military housing.” Military housing is a catch-all term for housing that might be owned by the government or owned by PPV companies like Lincoln Military Housing (LMH). PPVs were formed as the government’s response to the backlog of maintenance needed on military housing during the last century. The Military Housing Privatization Initiative (MHPI) gives LMH and other PPVs the authority to lease land from the government and build or renovate homes. In this way, PPVs offer a safe and reliable alternative to looking for housing “out in town.”

But before you decide where the best place to live might be for you and your family, you need to get a few things in order first.

First, what is BAH?

Basic Allowance for Housing (BAH) is an allotment provided to service members to cover up to 95% of housing costs. This military housing benefit has been around for decades and is designed to help cover the cost of renting a home. BAH provides service members with equitable housing compensation “based on the housing costs in local civilian housing markets.” BAH is based on rank, family status, and duty location.

Are all BAH rates the same?

Not at all! Someone stationed at Norfolk, VA, will have a different allowance than someone stationed in San Diego, CA. USMC BAH rates, like Navy rates, are specific to the assigned duty station. So no matter if you’re looking for San Diego naval base housing or Norfolk military housing, your rates will reflect the location listed on your orders.

Now that you understand how BAH works, how can you make the most of this military entitlement?

The key here is figuring out how much you can spend and precisely what you and your family want in your new home. With that knowledge, you’ll have the high-level info you need to make the most of your BAH and find a home that suits you and your family’s needs.

Creating a budget and sticking to it is essential

Financial stability is essential for military families since finances can impact everything from top-secret clearance to covering emergency purchases. When calculated correctly, a budget can provide you and your family with financial freedom and the peace of mind to know that there’s money available when you need it.

If it feels like creating a budget is something that you want help with, Military Service Organizations (MSOs) can help! The Navy-Marine Corps Relief Society can help you craft a budget specific to your family’s needs.

One of the highest costs military families face is figuring out how to pay for housing. Since housing costs fluctuate based on the duty station, this is one of those areas of your budget that you should always keep a close eye on - no matter if you still have years to go until your next PCS.

Understanding how much money you want to spend, how far you want to live from your installation, and what amenities are important to you and your family can help you make the most of your BAH.

How much can you spend?

First, start with a candid conversation with your spouse. What does living “within BAH mean to you?” Let’s imagine you want all of your rent and your utilities covered by your BAH. The key to figuring out what you and your family can safely afford all comes down to your income, your cost of living, how much debt you have, and your long-term goals.

The general rule of thumb is that you shouldn’t spend more than 30% of your annual income on rent. Remember that this is just a general guideline and not a mandatory rule. But if you aim to keep your rent within that number, chances are you’ll be closer to being financially stable than if you spend more than that amount.

If it’s critical to you that BAH covers your rent and utilities, then you might consider living in privatized housing, like the communities offered by LMH. LHM rents are matched to your BAH and, in most cases, your utilities are also covered. That means that you won’t need to worry about extra energy, electricity, and water expenses.

How far away do you want to live?

This is an important question to ask when evaluating how you can maximize your BAH. Living close to work cuts down on commute times, which can help you and your family save money in the long run. In this case, choosing a house on base might be the best answer for you.

What Amenities are Important to You and Your Family?

Consider what amenities are important to you and your family. If you have little ones and want access to lots of parks and community centers, then living “out in town” might not give you what you’re looking for. The same goes for wanting to be near neighbors who understand the military culture and know what you’re going through. That’s another added benefit of living in an LMH community - not only do your neighbors understand the culture, but they live it every day, just like you. Finally, if it’s important to you that you have access to amenities like pools, fitness centers, and resident events, then living in an LMH community makes sense.

When you’re looking for ways to make the most of your BAH, you should be prepared to have a candid conversation with your spouse about how much you and your family are willing to spend on housing. Next, have a clear idea of how far away you might want to live from the base, and then decide what community amenities are important to you.

When you choose to live in an LMH community, your rent will be matched to your BAH, and in most cases, you won’t be responsible for utilities, either! You’ll be close to work and have access to fantastic community amenities like pools, fitness centers, and resident events designed with you in mind.

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