Each year, thousands of military families execute a Permanent Change of Station (PCS) move to a location that is outside the Continental United States (OCONUS.) During your time abroad, the ways you can save money may be different than the ways you think to save money when you are living within the US. Here are some ideas of how you may be able to save money while living overseas.
Consider Your Auto Choices
Many expenses associated with owning a car are more expensive in OCONUS locations. Fuel, insurance, and maintenance may all be more expensive, and sometimes even more complicated.
Your OCONUS orders may come with authorized shipping of a vehicle, and/or it may authorize the storage of a vehicle in the United States. Many people’s initial reaction is to take their car with them, and that may be the right choice for their family and overseas location. Or it may be ridiculously expensive or horribly inconvenient. And sometimes it is hard to predict these things in advance.
I’ll tell you a little personal pro-con story about taking a US car overseas. In 2010, our family moved to Naples, Italy. Our American-brand minivan was aging rapidly, and I was uncomfortable with the idea of finding maintenance and parts for it in Italy. I did a ton of research to figure out the smallest 8 seat SUV. That turned out to be a not-brand-new Honda Pilot. We purchased a slightly used Honda Pilot a few months before we left the US and put it on a boat to Italy. (Well, not directly to Italy. You know how those things go.)
When we got to Italy, we picked a great house about, oh, 20 miles from the base where the health clinic, school, commissary and gym were located. It was right on the school bus route, which was important to us. I didn’t want to be driving back and forth twice a day for school runs.
As it turned out, I made that drive almost every single day that we lived in Italy. Sometimes twice. Sometimes three or times. One kid had health issues, so we were at the clinic a lot, plus she was on a modified school schedule. And we couldn’t get internet at our house, but the kids had a ton of online schoolwork, so we were library lizards and sometimes even just sat on the ground outside the closed USO doing work and schoolwork.
I discovered that the Pilot got relatively lousy gas mileage – about 17 miles to the gallon. And that we only got 400 litres of gas per month at the preferential military rate. That was about 5 tanks of gas, which would last us 1/2 to 3/4 of the month if we didn’t travel. The rest of the month, or if we went on a trip, we were paying roughly $6 a gallon for fuel. (Very roughly.) When I would fill up the car, it triggered the fraud protection on my credit card almost every single time. “But you just spent $120 on gasoline,” the bewildered fraud protection customer service rep would sputter.
We loved that car, and it was a great friend during our drives all over Europe. And it WAS handy to have those two extra seats when we had guests. But our gasoline budget was $800 to $1200 a month. That’s insanity, even with COLA to offset the expense. In retrospect, we should have found a much more fuel efficient car. (We also should have lived much closer to base, but that’s a whole different story.)
Another reason we should have considered a local car is maintenance expenses. The Pilot isn’t a model that is sold in Italy, and parts were hard to get. One time, my mother-in-law had to get a part from her local dealership and mail it to us in Italy. It was kind of ridiculous.
We have lived overseas in four different locations, and in three of those locations, there was a strong used car sale market with a wide variety of well-priced vehicles available. (The fourth location was a strange one, so I’m not even sure it should count towards this discussion.) Our “lemon lot” purchases have worked out well for us.
Bringing your US car overseas may be a great choice for your family, but don’t discount the possibility of buying used at your overseas home – and keeping an eye on the gas mileage!
Plan The Best Way To Exchange Currencies
If you are moving to a location that doesn’t use the US dollar, take some time at the beginning of our tour to determine the best way to transfer money between currencies. Differences in fees and exchange rates can cost you several dollars per hundred. If you are living in town and paying large bills in the local currency, it is definitely worth your time to figure out the best choices for money exchange. Your options may include the military exchange, on-base or in-town banks, or online services such as xe.com. You’ll probably need a bank account in the local currency; if you have choices, compare them before you decide which bank will work best for you.
At the same time, make sure you have a good credit card that doesn’t charge foreign transaction fees. No sense realizing two years later that you could have been saving those silly fees!
Choose Your Home Carefully and Negotiate Your Lease
If you live off base overseas, you receive Overseas Housing Allowance. OHA is a use-it-or-lose-it allowance, which means that you’ll receive the amount of your actual rent, up to the OHA rate for your location, ranks, and dependency status. Because OHA is use-it-or-lose-it, many people choose larger houses than they actually need. Might as well, right?
Not so fast! First of all, larger houses come with higher utility bills. You’ll receive a monthly utility allowance, but that is not a use-it-or-lose-it allowance. Any utility allowance that you don’t use remains in your pocket, but any amount that you go over the monthly utility allowance will come directly out of your pocket. Utility efficiency should be a consideration in your house hunt.
Once you find the right house, see what you can negotiate to be included in your lease. There are rules about what or how many utilities can be included before it impacts the amount of of your monthly utility allowance, so be sure to know the rules before you try to get utilities included in your lease.
But you can negotiate within those rules, and you can also negotiate other items. Things I know that people have included in their leases include lawn service, bottled water service, upgrades to the home, even housekeeping. Just check with your local housing office – you don’t want to do anything that is against the regs.
Live Like A Local
The best way to keep costs down on an overseas tour is to shop like a local. Find the produce markets and discover what is best from your region. Check out the supermarkets and see if prices are better than your commissary (if you even have one.) Use local products that are designed the area, such as cleaning products that are designed to work with the water where you live. Avoid touristy-restaurants and find out where your neighbors eat.
An overseas tour can be an amazing opportunity, and many people save a lot of money while OCONUS. But it is also possible to overspend by making more expensive choices, often because you don’t know that there are other options. Use your new community to find the frugal ways to enjoy live in your new home, and have fun!
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