Preparing a household budget to cover for occasional services for a move will result in a long list of unintended, yet unpredictable expenses to cover for last-minute hotel stays, loss or damage, unexpected utility deposits, and for cash to last until the first pay check at the new location. Even though some service households may get help to pay for some of the relocations, the timing, the degree of needed assistance, reimbursement, and the many unexpected expenses all vary greatly. This is why having a small reserve to cover for the occasional, unexpected expenses that have the potential to develop into very high-interest debt is so important. It's not meant to be a fully-funded reserve to handle all the future moves, but rather a simple, repeatable way to save some money while the household is going through the known expenditures of a move.
Start with the expense that keeps breaking the budget
Look at your last move and get out your last few months of bank statements. That costly fast food meal, high price of gas for the long drive, unusual quantity of cleaning supplies, extra school supplies, tolls along the way, storage of short-term, advance deposits for first month's rent and utilities, and even minor repairs to your vehicle all get written down. These strange but common 'relocation expenses' are certain to exceed expected costs and end up coming out of your move fund as they were unexpected.
Thus, you must distinguish between expected expenses that you can include in your budget for the move and other, surprising, costs, which must be reserved for in the case of an emergency. We expect you to treat all expenses for relocation that are expected in your move planning, even if you cannot determine their exact costs. As for the other expenses, which occur by surprise, you must reserve for them in your emergency fund.
Write down three working figures:
– Cash already available for moving-related needs.
– The cost of items for which you will be repaid prior to the date of reimbursement or repayment.
– A small amount you want to leave untouched in case of an emergency.
This is just rough stuff to get you started. The key to a good budget is listing out all of your expenses. The rough numbers here will help you create a workable plan, even if it's not perfect at first.
Build the reserve in layers, not all at once
Start with a small first layer to handle unexpected events and immediate inconveniences. Then, work your way up to building a fund to help with the costs of your move. After that, continue building your emergency fund for unexpected events that may occur in the future after you have arrived at your new Service household.
Additionally, consider the time frame that the money will be available to use versus when the actual move will take place. Directing 100% of all cash towards the largest goal first can leave families without means to cover a single flat tire, or an emergency trip to the local hospital, let alone a delayed reimbursement of Funds due under current regulations. Allowing for the funds to be build up in smaller amounts over time and distributed to their respective purposes will best prepare the household for the surprise costs associated with relocation.
Consider labeling a section of your budget or your savings for the different purposes such as move costs or emergency. While it is not necessary to keep them in separate accounts, keeping them in clearly marked areas can help you to distinguish them from your other needs and thus prevent you from spending them on non-essential items such as takeout.
Turn move planning into a weekly cash check
Know the days until next paycheck and list out fixed payments (like rent or mortgage), major bills, and travel dates for you and your family. List out expected deposits, setup fees for services that you will need to pay for in advance, and any expected replacement of clothing, household items, etc. to ensure you have set aside enough cash for emergency use between paydays.
Plan to move and track expenses in a simple weekly calendar check. The simple form has space to record the date of each paycheck, space to list and track fixed expenses to be paid before the next paycheck, space to list anticipated move related expenses, space to list deposits, setup fees and other anticipated payments and minimum cash reserve available to spend for real emergencies.
Take into account the reimbursement dates as well as any restrictions on what will be reimbursed and how (i.e. orders, forms, receipts, online submissions, etc.). Read the most up-to-date information from the official source of your military service and family of services.
A simple worksheet can include:
– Date and amount of each expected paycheck.
– Fixed bills due before the next paycheck.
– Travel, lodging, food, and transportation costs.
– Deposits, setup fees, and replacement purchases.
– The minimum balance you will not use except for an actual emergency.
Decide what counts as an emergency during relocation
Make a list of things that would be considered emergencies during a relocation and things that are desired but not necessary. Note that broken appliances that would affect the food in them (e.g. refrigerator, freezer) would be considered urgent but a cosmetic repair to something already in good working condition would not be needed until after you have had time to settle into your new home.
While it is true that some things are more urgent than others, it does not necessarily mean that all urgent things can be covered by the emergency fund. It is also true that some things that appear to be necessary can be covered by other means. For example, it may be possible to postpone fixing a non-essential appliance that does not affect the storage of food.
Just because a loan can fit in your budget does not mean you can afford to make the payments. The cost to borrow money varies widely depending on the borrower and the lender, and even military-specific protections and programs have conditions. Read all the requirements and understand the full terms and conditions of any credit you consider to use to cover an unexpected expense to ensure you are not just shifting the problem to your credit and paying more in interest in the long run.
Rebuild after the boxes are unpacked
While the reserve can be used during the move, by having used it during the move it is important to understand what appeared to be unpredictable expenses that actually were and what could have been paid less had the move occurred a month or so later.
After the boxes have been unpacked, use the remainder of the reserve in the first settled pay period to restart transfers at the sustainable amount for your household. Also, make sure to record all of the unexpected expenses for items such as deposits, transportation, schools and other basic needs of the household that were needed after arrival and used against the reserve.
Having a reserve of money does not have to mean having a massive amount of money set aside for emergencies. It just has to be there, monitored against the calendar and used for emergencies as necessary to prevent having to make rushing, often less-than-ideal decisions in order to deal with a 'crisis' that had unexpectedly arisen.
