Currency Exchange Rates and Their Effects on Military Members

Even when not in conflict, many military members are required to live abroad. There are dozens of U.S. military bases all over the world, and although the military tries to compensate for the varying standards of living, there is no doubt that military members are affected by the different currency exchange rates.

Currency Exchange Rates

When stationed abroad, military members do not receive the general Basic Allowance for Housing.  Instead, they are given an Overseas Housing Allowance. While a BAH is a flat monthly rate set by a service member’s rank, location, number of dependents, and can go toward off-base housing, the OHA is a bit more flexible to accommodate for the varying standards of living. OHA is partly calculated by the average rent and utility needs for the area, with the other part being based on pay grade. The assistance also includes a one-time payment for moving-in expenses.

The Best and the Worst

When it comes to living abroad, countries dramatically differ in cost of living, and even within a country, the cost of living can vary by several thousand dollars. A few of the most expensive cities to live in include Seoul, Tokyo, London, Paris, and Moscow. While most of these cities are expensive due to the high cost of rent itself, which should be factored in to an OHA, the simple costs of food, entertainment, and transportation are generally are also a bit higher than other cities and should be considered when moving to one of the many overseas bases.

A few of the least expensive cities to live in include Toronto, Brussels, and Mumbai. Real estate is generally low, but that doesn’t mean that the USD can go farther here. The OHA given for these areas will be lower because of the lower cost of rent, however, Brussels, which resides in the UK adheres to the Euro, which is currently valued higher than the USD.  The Canadian Dollar, however, is nearly equivalent to the USD so military members can expect fair living, and the Indian Rupee is far less than the USD, so military members stationed within India can expect higher living on their stipend, in spite of the lower OHA given.

While the USD may fair well against the currencies of South Korea, India, Japan, and Russia, it is currently worth less than the Euro, which nearly all of Europe uses. So if you are stationed in an expensive European city, not only will your rent be high, but food and other necessities will also be higher because of the dollar difference.  Military members moving to European countries in particular need to factor in the weak dollar compared to the stronger Euro when considering regular monthly expenses.

Great Ways to Save Abroad

When considering living on a budget abroad, your practices shouldn’t be much different than living stateside. A few great ways to save money while living abroad include:

Ask Around

Finding an inexpensive, yet safe and conveniently located, place to rent isn’t always an easy task when you are renting from overseas. However, just because you start leasing a specific place doesn’t mean you need to stay there for the duration of your deployment. Once you make more contacts and familiarize yourself with the city you are in, start asking around for cheaper places to live, shop, and eat. You’ll be quick to find several inexpensive places that are off the radar.

Eat In

While a little exploring is definitely worth it when you arrive in a new city, eating out every night is something you should avoid. Eating out, like it is stateside, is an incredibly expensive habit that can have you wasting hundreds of dollars a month. To live within budget, eat in and save eating out for special occasions.

Skip TV Packages

Even abroad cable is incredibly expensive. If you know that you are going to need internet in your home, avoid purchasing cable with it and instead stick to services like HBOgo, Hulu, and Netflix for your entertainment needs. These services cost a fraction of the cost of traditional cable, and are more portable allowing you to watch your favorite movies and shows no matter where you are.

Ditch the Car

If you are lucky enough to get stationed in a large metro area, save money by ditching the car. Insurance, car payments, and high gas prices can make the expense of owning a car not worth the convenience it provides, and public transportation generally makes owning one unnecessary.

Prior to moving, military members need to consider the ways in which they spend at home and how those expenditures might change after moving. Each country also has its own tax laws, so military members need to educate themselves on their country’s income taxes so they know just how much pay they will be receiving. Otherwise, living abroad is an exceptional opportunity, and can provide even those well-traveled, such as most military members, with great new perspectives.

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