What's that motto? Join the Navy, SEE THE WORLD!
Well, lets break it down, shall we?
PART 1: THE COST OF LIVING
Houses cost more in areas like Hawaii verses Oklahoma, right? Yes, MUCH more. So if "free" housing wasn't available to the military, how could they afford to live in homes in that exotic Hawaii location that cost in excess of $1 Million Dollars (for a two bedroom, non A/C, carport home) when they only make, say, $40,000 a year?Short answer: They would be living in a tent.
What's that brah'? Need another tarp? Mahalo!
PART 2: UNDERSTANDING THE PAY
A- Service Member gets paid a base pay rate that is determined by his number of years and his rank (advancement, like moving up in the corporate world).B- Service Member gets paid a housing allowance that is determined by his rank (that advancement thing again), whether or not he/she has dependents (scoff! I LOATHE this word!) also known as a spouse and/or children AND by the location where the service member is living. Yes, this rate changes depending on where the military member is living as it's based off the economy of that area.
A+B= C (final amount of paycheck)
Let's take a sailor who has been in the Navy for 10 years, at the position of an E-6 and lives in Hawaii.
A (base pay)= $3,331 a month (annual salary $39,972 before taxes) pay chart found here
B (housing allowance)= $2,952 a month (annual allowance $35,424) Allowance chart found here
C (total amount)= $75,396 annual salary or a family of 4 to live in Hawaii (before taxes).
Yes, $75,396 annually to live like kings in Hawaii. This includes housing, utilities, food... the works!
The only crown I could afford in Hawaii
Wait, you can't live like kings on that amount? WHAT THE EFF?
Oh, you mean I should live in the "free" housing that the military provides so I can afford to eat and not live in a tent? That means you receive your "free" house but now your paycheck is once again down to...
$39,972 annually (before taxes)
You just paid $35,424 to live in base housing.
BUT you have adequate housing that is safe and in some cases, very nice. I currently reside in one of those nice areas and am soooo happy! In other cases, your washer/dryer hookups are outside in a carport, you don't have A/C and the lead paint is chipping of the wall (but don't worry, just don't let your toddler crawl on the floor then put their hands in their mouth....TRUE STORY!)
Part 3: THE NUMBERS
Let's throw a few scenarios out there to explain why this housing is available and why military often cannot afford to own a home where they are residing:Housing allowance numbers are based on the Base Pay Annual Salary (A) of:
E-3 payrate (working in the military for 3 years): $2,034.90 = $24,418.80 annually before taxes
E-7 payrate (working in the miliary for 18 years): $4,323.90 = $51,886.80 annually before taxes
VENTURA COUNTY, CALIFORNIA
Median Home
value: $477,400
Mortgage calculator says monthly payment would be: $3,060.08
NAVY ALLOWANCE:
E-3 with a spouse/child receives $1,800 (single/no kids $1,350)
E-7 with a spouse/child receives $2,388 (single/no kids $1,809)
VERDICT: CANNOT AFFORD TO OWN A HOME
So that means...
The E-3 with family makes a total of $46,018 a year total in California. CALIFORNIA! If they decide to live in base housing, their annual pay goes back down to $24,418.80 and they paid $21,600 for their "free" housing.
The E-7 with a family makes $80,542.80 annually in California. If they live in "free housing" then they pay $28,656 and their annual pay is now back down to $57,886.80.
OAHU, HAWAII
Mortgage calculator says monthly payment would be: $4,490.98
NAVY PAYS:
E-3 with a spouse/child receives $2,607 (single/no kids $1,956)
E-7 with a spouse/child receives $3,189 (single/no kids $2,613)
VERDICT: CANNOT AFFORD TO OWN A HOME
So that means:
The E-3 with 3 years in and has a family makes a total of $55,702.80 a year total in Hawaii. HAWAII! If they decide to live in base housing, their annual pay goes back down to $24,418.80 and they paid $31,284 for their "free" housing.
The E-7 with 18 years in and has a family makes $96,154.8 annually. If they live in "free housing" then they pay $38,268 and their annual pay is now back down to $57,886.80.
So that means:
The E-3 with 3 years in and has a family makes a total of $55,702.80 a year total in Hawaii. HAWAII! If they decide to live in base housing, their annual pay goes back down to $24,418.80 and they paid $31,284 for their "free" housing.
The E-7 with 18 years in and has a family makes $96,154.8 annually. If they live in "free housing" then they pay $38,268 and their annual pay is now back down to $57,886.80.
NORFOLK, VIRGINIA
Median home value: $250,229
Mortgage calculator says monthly payment would be: $1,603.94
NAVY PAYS:
E-3 with a spouse/child receives $1,380 (single/no kids $1,077)
E-7 with a spouse/child receives $1,815 (single/no kids $1,389)
VERDICT: CAN AFFORD TO OWN A HOME *IF* OF A CERTAIN RANK
So that means:
The E-3 with 3 years in and has a family makes a total of $40,978.80 a year total in Virginia. If they decide to live in base housing, their annual pay goes back down to $24,418.80 and they paid $16,560 for their "free" housing.
The E-7 with 18 years in and has a family makes $79,666.80 annually in Virginia. If they live in "free housing" then they pay $21,780 and their annual pay is now back down to $57,886.80.
So that means:
The E-3 with 3 years in and has a family makes a total of $40,978.80 a year total in Virginia. If they decide to live in base housing, their annual pay goes back down to $24,418.80 and they paid $16,560 for their "free" housing.
The E-7 with 18 years in and has a family makes $79,666.80 annually in Virginia. If they live in "free housing" then they pay $21,780 and their annual pay is now back down to $57,886.80.
THE END RESULT:
Bam! What? Wasn't what you were expecting? How's that "free" housing that you pay for treating you now? And do NOT get me started on how much it costs for utilities/food/gas in that area!!!
I wonder if civilians truly realize how much military members make? I know some who think that we have a sweet deal (in other ways we do!) and believe we make fist fulls of money, to which they have said and I quote: "WHY DO YOU NEED A MILITARY DISCOUNT TO THE THEME PARK AND I HAVE TO PAY FULL PRICE? YOU GET FREE HOUSING!" (again, true story!)
Which prompted me to do my research.
Sound off and let me know your own experiences! Mahalo!
Oh....so true!!! SO VERY TRUE! Thank you for this!!
ReplyDeleteYou're leaving out one major fact here...BAH is NOT meamt to cover your mortgage, only your rent. I can only speak for Norfolk, but I was actually MAKING tax free money due to proper budgeting and selection of apartment. Please don't further the notion that servicemembers don't make sufficient pay because they definitely do and, as always, most of that boils down to proper budgeting.
ReplyDeleteMost places, renting an apartment or home is actually more expensive than having a mortgage. If you're renting a home in an area that is predominately military, most likely the market's rent prices are equal to the BAH an E-6 with 10+ years gets compensated. Add to that the cost of utilities, you're above BAH and likely paying out of pocket. Or, if you're in an area that is less reliant on the military and more middle-upper class/white-collar, even with the cost adjustments made for market/location, BAH isn't always enough to be able to afford living anywhere but base housing. An E-5 with 8 years, a spouse and two kids might be able to rent a 900 sq ft, two-bedroom apartment for $1200/month (plus utilities), OR they can live in base housing where they'd be in a 1400 sq ft, three-bedroom townhome/duplex, with a yard, carport/garage, and some, if not all utilities paid for the price equal to the BAH received. Service members are compensated, but not that well. And, most certainly, not enough if their take-home pay has them below the poverty line. Especially since they are unable to receive many of the services offered to their impoverished civilian counterparts that are often living in the same neighborhoods, because that, too, is what they can afford. Budgeting and making sensible financial decisions doesn't always come easily to everyone. Childcare is expensive, even at the base/post facilities. Provided the spouse, for whatever reason, has chosen work to be beneficial, often times their earnings are just enough to cover the expenses of childcare and travel to and from work. Yet, in the end, it has put the family into a higher tax bracket, thus putting a higher financial burden on the household. There are many, many factors at play with military families. No two are alike. "Sufficient" compensation *should* mean they wouldn't have to struggle in any of the instances I've stated.
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