Don’t ‘bank’ on Cost of Living Allowance

Living overseas can be expensive. However, things like the Cost of Living Allowance, or COLA, are designed to help offset expenses occurred from the local economy.

But officials stress that Airmen should not view COLA as a reliable source of income and encourage them to save it where possible for times of spikes in the exchange rate or emergency needs.

“My advice is to plan everything on your base pay,” said Staff Sgt. Heather Borland, 86th Airlift Wing Comptroller Squadron, non-commissioned officer in charge.

“You should use your Overseas Housing Allowance on your home, your Basic Allowance for Subsistence on food, and then COLA should just be extra.”

The exchange rates are evaluated at least twice per month to ensure they are kept up to date with the local area currency.

COLA payments are based on the member’s regular military compensation and their spendable income. This includes basic pay, BAS, and the results derived from a living pattern survey taken every three years.

The last living pattern survey in U.S. Air Forces in Europe was conducted last year.

When COLA is used as an amenity to the rest of the paycheck, it can be used for things like saving money or traveling.

“I’ve even heard of people saving their COLA, as if they aren’t even receiving any, and then leaving with a substantially larger savings account,” Sergeant Borland said.

For some, COLA is a necessary part of their paycheck, using every last bit of their check for things like traveling, shopping off-base or even monthly bills.

“Some people forget that COLA is extra,” said Anna Bennett, Airman & Family Readiness Center Air Force Aid officer.

Ms. Bennett even suggests that when COLA is saved as an extra, it can be used for unexpected expenses.

“With the right budgeting, a lot of financial stress can be lifted,” Ms. Bennet said.

The A&FRC offers individual counsel and a “Managing Your Money” class on the third Thursday of every month.

“We welcome anyone to call the Airman & Family Readiness Center to set up one-on-one budgeting assistance,” Ms. Bennett said. “People look at budgets as a financial diet, but it is more of a road map.”

Those seeking assistance in budgeting their finances should contact the A&FRC at 480-5900 or at 06371-47-5900.