Basic Allowance for Housing (BAH) or Overseas Cost of Living Allowance (COLA), which one is the real money maker for military personnel?

TSgt Private RallyPoint Member — Sat, 23 Apr 2016 11:49:55 -0400

I have heard a lot of people say that they lose money when moving overseas and I have heard a lot of people say that they lose money going back stateside. BAH or COLA, which one brings in the most savings for military personnel and why?

Response by PO1 William "Chip" Nagel made Apr 23 at 2016 12:02 PM

PO1 William "Chip" Nagel — Sat, 23 Apr 2016 12:02:18 -0400

All the Above, I forget all the Special Pays I was getting while I was stationed in London but it was Nice.

Response by Capt Tom Brown made Apr 23 at 2016 12:30 PM

Capt Tom Brown — Sat, 23 Apr 2016 12:30:56 -0400

Assuming both allowances are tax free I would go with the larger one first and try to save an amount equal to both of them if possible.

Response by MAJ Private RallyPoint Member made Apr 23 at 2016 12:57 PM

MAJ Private RallyPoint Member — Sat, 23 Apr 2016 12:57:16 -0400

BAH seems to rarely cover or defray rent. COLA is in addition to OHA, and seems to always be sufficient to defray costs. So I'd say COLA.

Response by CSM Darieus ZaGara made Apr 23 at 2016 4:17 PM

CSM Darieus ZaGara — Sat, 23 Apr 2016 16:17:05 -0400

They are not intended to be money makers, if you and your Family can live more economically and bank some of it then that is good for you. If too many people brag about any benefit being in excess/money makers I can assure you that someone will take notice and look to correct it politically.

Response by SFC Private RallyPoint Member made Apr 26 at 2016 6:01 AM

SFC Private RallyPoint Member — Tue, 26 Apr 2016 06:01:29 -0400

Well cola keeps getting cut here in Germany which is a hardship increase for my family. If you live off post you will pay rent for the exact €€ amount. So no profit for finding something below your limit.

Response by MAJ Private RallyPoint Member made Apr 26 at 2016 6:20 AM

MAJ Private RallyPoint Member — Tue, 26 Apr 2016 06:20:21 -0400

COLA is so low right now that I don't feel it makes much difference.
BAH is a housing allowance to provide a home for your family. It is more about money management and living within your means. There are properties available for less than the allotted BAH, in those cases a family could bank the difference. However, if people factor utilities and possibly cable into their monthly allowance they could find a place that covers more than just rent.

Response by SCPO Joshua I made Apr 26 at 2016 7:03 AM

SCPO Joshua I — Tue, 26 Apr 2016 07:03:14 -0400

BAH and COLA aren't the same thing. BAH is the state-side equivalent of OHA. COLA is an allowance meant to compensate for the higher cost of goods at some overseas locations. Neither is a "money maker", they're all allowances to pay for housing and living expenses.

Response by SPC Private RallyPoint Member made Apr 26 at 2016 11:51 AM

SPC Private RallyPoint Member — Tue, 26 Apr 2016 11:51:33 -0400

I was able to save more BAH than COLA.. COLA fluctuates month to month so not really a guarantee to save depending on the projections.. BAH I saved for a little while while in the DC area but I tell you my family's living corridors were not up to par! I quickly moved them to the standard of living over in MD. But to answer your question, in my case, BAH can be saved easier with sacrifice to living conditions. COLA is more closely looked at and it really only covers the cost of living.. It's almost as a sort of tax relief every month. Here in the great Euro anyway.

Response by SSgt Private RallyPoint Member made Apr 26 at 2016 12:48 PM

SSgt Private RallyPoint Member — Tue, 26 Apr 2016 12:48:50 -0400

So COLA and BAH are totally different.
BAH covers you cost of rent, pro rated based on what state you live in. If you find a home that costs less to rent, the extra BAH goes into your pocket.
OHA is Overseas Housing Allowance which is set to a specific amount per country. If your OHA is £920 and your rent is £750, you don't see a dime of the difference. COLA is a stipend to assist those living on the "economy" as exchange rates are usually much higher.
Neither the OHA, BAH or COLA are moneymakers. They are privileges we are given. And that can be taken away.
Which I know is an are of contention with the DOD and Congress at the moment because of the "moneymaking" BAH is providing.
OHA and COLA are desperately needing when living overseas with a family when the Base has no base housing (or is full).
As a married SrA who lives on the economy, if I didn't have OHA or COLA I would barely be able to feed myself because of the excessive exchange rate.

Response by CW2 Private RallyPoint Member made Apr 26 at 2016 10:50 PM

CW2 Private RallyPoint Member — Tue, 26 Apr 2016 22:50:04 -0400

I understand the question yet find it slightly disturbing in the sense that it reflects poorly on all service members. I agree that we do not sacrifice as much as we do for free but yet, I do not feel the need or urgency to try to purposefully put a price tag on my service. Like you have stated in various comments, if you don't use the full amount of the allowance then you "pocket it" so to speak, yet the purpose of the allowance is to have you live in reasonable conditions. I've seen many soldiers try to live in small apartments to save some money and if in financial need then I see the reasoning yet, if you have a family, there is no necessity to squeeze everyone in a studio like a can of sardines to be able to buy unnecessary things. Your use of BAH or COLA is a personal matter and you should study your finances and find a solution that is legal and appropriate for your family finances. If you need assistance to study your finances better and find solutions get with a financial advisor on any base who will be more than happy to give you all the advice you need that'll fit your particular situation, rank, pay, lifestyle and have you living within your means and saving for your future. I hope this helps!

Response by SSG Chris Garabitos made Apr 27 at 2016 10:26 AM

SSG Chris Garabitos — Wed, 27 Apr 2016 10:26:41 -0400

Neither. Both are intended to assist a service member live within their means and less worries to support their family. If finances either CONUS or OCONUS, is your concern, seek help from a counselor.