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Don't 'bank' on COLA
Posted 10/14/2010
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by Airman 1st Class Ciara M. Travis
86th Airlift Wing Public Affairs
10/14/2010 - RAMSTEIN AIR BASE, Germany (AFNS) -- A cost-of-living allowance is designed to help offset expenses incurred from living in a local economy.
However, officials stress that Airmen should not view COLA as a reliable source of income, and they encourage them to save it where possible for times of spikes in the exchange rate or for emergency needs.
"My advice is to plan everything on your base pay," said Staff Sgt. Heather Borland, the NCO in charge for the 86th Airlift Wing's comptroller squadron. "You should use your overseas housing allowance on your home, your basic allowance for subsistence on food, and then COLA should just be extra."
Overseas, 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 a servicemember's regular military compensation and 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 the U.S. Air Forces in Europe area of responsibility was conducted in 2009.
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.
However, some servicemembers view COLA as 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, an Airman and Family Readiness Center Air Force Aid officer.
When COLA is saved as an extra, it can be used for unexpected expenses, Ms. Bennett said.
"With the right budgeting, a lot of financial stress can be lifted," she said.
The AFRC staff here offers individual counsel and conducts 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 a staff member at their AFRC.
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| Steve, Tampa |
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| Frank, Tinker |
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| Ciara, Ramstein |
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| DK, DE |
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| DT, JP |
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| MM, NE |
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