Maintaining Financial Course Through Change

Managing family finances during a PCS Transfer. How little changes can make a big difference. - By SK2 Randy Jordan

I’m an active duty member of the US Coast Guard with over 14 years of service. During my career I have endured through the financial woes that the country has faced and my own financial corkscrew path as well.

Military members face changes in locations on average of every 3-4 years and with every new relocation comes a new financial climate and local economy. Along this career path we establish our love interest and start or grow families.  It’s amazing, cool, and beautiful, but can often be scary because our number one concern is always “What’s best for our family’s financial stability?”

Maintaining a Steady Financial Course While Navigating Change

It’s our duty to answer the call of service and we take great pride in protecting our country, but don’t want to do it in an unstable financial position. So how do we navigate change and maintain financial freedom?

I know what you are thinking — Military members get free financial advice and training offered everywhere they turn. How could they not be using it? Well, we tend to not use our financial services. One big reason is that no one wants to look like they can’t manage their finances.  But we have to do something that most Americans are not regularly doing, and that’s budgeting and saving.  (Don’t tell my wife, but I learned this from her.)

Financial Challenges of a PCS Transfer

Last summer, I faced a financial challenge of my own.  I was stationed in Norfolk, Virginia and had purchased an amazing home for my family there in 2015.  Then the time came for the transfer season in 2018 and I felt the need to get back to California to be closer to family.   My mother had some health issues and could not move our way, so I decided to move closer to her.

Now here is my pickle– I owned my home in Virginia, but I would need to rent a home in my new duty station in California.  Not just any part of California — the Bay Area, by far the most expensive area, cost of living-wise. (It’s so expensive that a six-figure salary is considered low income.)

Yikes!! In Virginia the mortgage prices for a house are what studio apartments run for out here.  How could I plan to manage my mortgage and rent a place to live here?

Well the obvious thing might be to rent out my home right? Of course! And I set out to do so.  But before that I had to make sure that I could set aside enough money to afford both my VA mortgage and the rent in the new location if need be.

I bet a light bulb just went off in your head– You’re thinking, why not just sell the house? Well, I thought that too.  But I love that house and felt like it was a great property in a great location.  Anyone, especially fellow service members, would jump at the chance to rent it.  As an extra bonus, it’s in the middle of 3 naval bases and 3 Coast Guard bases/facilities; less than 15 minutes drives to all those locations.

I went against my wife’s will and didn’t sell.  It would be a huge loss for me personally, so I convinced her to trust me.  (That took some time.  She’s no dummy.)

Instead of selling, I began to budget. I had to make sure I could afford to maintain both my house and my rental-to-be if things didn’t go as planned. I started by shopping for homes and trying to stay within a budget. We cut some of the daily expenses like dining out, subscriptions like Hulu, Netflix, Spotify, and Amazon. We started to shop more adequately for food, not just buying everything in bulk (which may go bad before it gets to the dinner plate.) Amazingly even travel came into play.  Utilizing our car, which had better fuel mileage than the truck, allowed for less gas consumption and time at the pump.

A big reduction in spending was how frugal we became in forking over money for the kids and their need to stay up to date on the latest gadgets and social materials.  I mean things like video games, apps on their phones, shoes and clothes.  That’s not to say we didn’t buy the things they needed, like warm clothes for winter etc.  But we cut out the excessive purchases so they could be cool like the other kids. Explaining the reduction in spending to a teenager can be a tall task. But when you offer them choices like, “Hey do you want that new Xbox game or do you want lunch money for school?” they get the picture.  They might even learn to budget for themselves and save to buy that Xbox game on their own, which is a win-win!

The cutbacks were a big reason that I was able to put extra money towards savings and even helped to cover the cost of minor repairs to get the house prepped for rental availability. Here are a few of the things we did that helped our efforts.

• We decided to manage the rental ourselves to reduce spending money on a rental agent. (This was a risk, but it has paid off.) Instead, we created our own ads on rental listing sites like Zillow.com.
• We used Avail.com self-services to create a lease agreement and an application process for all interested parties. Note that the terms and time frame of the lease should be clear and reasonable.
• We charged a fee for the rental application of $25. Putting a fee on your rental application is key; it can help you to streamline the search with more serious inquiries. We were also very prompt and responsive to all our applicants.
• We only set up 2 days of open house viewing, one mid-week and one on the weekend. Random viewings of your home could be an opportunity for theft, so take precautions. We would not show the home to anyone outside of the scheduled viewing days just to be safe.

Within a couple of weeks we had 63 viewings online, 12 email inquiries and 8 full applications to review and decide on. By week 3 (a full month before the movers were scheduled) we found our renters.  We have had them in the home a little over 7 months now.

It has been a great experience.  The renters are very responsive, pay the rent on time, and enjoy the neighborhood’s proximity to work and social leisure activities. It has been almost a seamless process being a long-distance landlord, and the stress-free mind frame put us in a great space mentally to focus on finding the right home within our budget for our new location.

We continue to leave out much of the extra spending that we cut down on and keep adding to our savings in the event the renters decide not to renew the lease and we have to start the process again. We find we are living comfortably, even in a much more expensive financial climate like California.

The family does not even miss many of the things we cut out.  We cook more as a family and spend more time at the table discussing things.  We play games collectively as a family and spend less time on the couch with TV or streaming services. It was an unlikely discovery, and even though some of the changes we felt were very slight, in the end the whole journey of saving increased more than just our financial safety net, it jump-started more depth in our family unit.

I would love to hear about some of the ways you could think to cut costs in order to prepare for a relocation.  Even better, if you have real life examples of what to do to prepare for a PCS transfer, please share!

The opinions shared in this blog post are the author’s own and are not meant to imply or create an endorsement any specific product or institution.  Please bear in mind every rental or purchase is different and consult your financial advisor before making significant financial decisions.