If you're on active duty, you probably move a lot. Often, living on base or renting a nearby apartment makes the most sense financially. But renting can drain your bank account if you're caught off guard. Before you sign a lease, follow these three tips to help protect your hard-earned money.
1. Protect Your Stuff
Always make renters insurance a priority. This is important when you rent off-base, but it's just as necessary if you live in on-base housing or privatized military housing, such as a government-approved apartment complex.
If a fire or flood swept through the building, you are responsible for replacing your personal possessions -- clothes, electronics, jewelry and anything else you owned. The bill could total thousands of dollars. And it would come straight from your pocket unless you had renters insurance.
An adequate renters insurance policy can cost as little as $12 a month -- well worth it to protect you from a financial meltdown.
2. Stretch Your Housing Allowance
If you're not living in military quarters, you're generally eligible for some form of Basic Allowance for Housing, which is a tax-free, monthly allowance to help you pay for housing expenses. The size of your monthly check depends on your duty station and pay grade, and whether you have dependents.
It's important to understand that your housing allowance is calculated the same no matter what you pay for rent. If your rent is higher than your allowance, you'll have to make up the difference. If it's less, you'll enjoy a monthly surplus.
But don't make the mistake of matching your rent exactly to your allowance amount, because you won't have enough left over to cover items such as insurance and utilities. USAA's military affairs professionals recommend spending no more than 85% of your allowance on housing itself, reserving the rest for those additional expenses.
3. Insist on a Military-friendly Lease
When you're on active duty, numerous scenarios could force you to move before your lease has expired:
- Orders to move onto the installation
- Permanent change of station
Make sure a sudden move won't cause you to violate your lease agreement, leaving you on the hook for ongoing rent payments. Before renting from a private landlord, make sure the lease includes a so-called "military clause" that lets you terminate the agreement without penalty in any of these situations. Your installation's military assistance officer can help you draft language that gives you the protection you need.