Paycheck Chronicles

Most Financial Surprises Shouldn't Be That Surprising

There's one certain aspect of personal finance, and maybe particularly military personal finance, that a lot of folks have a hard time grasping: Most financial surprises aren't actually all that surprising.

This week's mailbag letter is actually a composite of many different letters. I don't want to respond to just one, because my response may not be as kind as I like to be. 

Dear Kate,

We just got surprise overseas PCS orders and we're not prepared to move. We just bought a house, which wiped out our savings, we have a new car with a big loan and it can't go with us, my wife has a great job, and my son has applied to colleges that are in-state for our current duty station but will be out-of-state if we move.

Signed, A bunch of readers

Sigh.

On one hand, I feel for every single person who sends these type of letters. I truly do. It's tough when you're working a plan and then the plan has to be up-ended.

But, let's be honest, the true problem here is the fact that any PCS is a surprise. Yes, sometimes PCS orders come unexpectedly. But if you're in the military, and you don't frame every decision around the possibility of a PCS, that's not a surprise. That's a failure to plan.

Of course, this applies to other financial surprises as well. Needing a larger car for a new baby? Cat got sick? Daughter needs braces? House needs a new roof? In most cases, these things aren't complete surprises. Even if unplanned, they were almost always within the realm of possibility. For these examples, complete surprises might be needing a larger car because you're having quadruplets (and weren't undergoing fertility treatment,) very young daughter needs orthodontics right now because of an extremely rare, unique situation that couldn't have been predicted and can't wait until more typical orthodontic age, or maybe house needs a new roof due to a freak incident that ruined a brand new roof but isn't covered by insurance.

Here's what I'm trying to say: Plan ahead. Thing through the possibilities when you make decisions. Understand that animals and kids and adults get sick, houses needed repairs, and cars break. Most importantly, understand that if you are in the military, there is always the possibility that you'll walk into work tomorrow and have orders to move. It doesn't matter your rank, time-in-service, current job, or anything else. (And if we meet in person, let me tell you about the time my Aunt Dot discovered they were moving when the moving van stopped in front of her house.)

Then, make your decisions fully understanding the risks you are taking. Most big financial decisions are risky, and it's easier to face that fact at the front end than to be cleaning up from that risk at the back end. In my experience, car purchases and home purchases are the two places that military families make decisions without thinking through all the possibilities. Making these types of big choices without considering what could happen can have devastating financial results.

So, before you buy that house or new car or take that new job or pick a college, consider the "what-ifs" and understand the risks you are taking. It's a good practice for anyone, but it is especially important for military families who may have less control over the changes that happen in their lives. And it may save you a lot of hassle and grief in the long-run.

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