Since its creation at the end of World War II, the GI Bill has allowed veterans to improve their post-military skills and earning potential by helping to pay for the costs of a college education.
While the program has always been tremendously helpful for veterans, it has only been in the last decade, with the creation of the Post-9/11 GI Bill, that the program has paid out a housing allowance to help veterans pay for additional expenses while enrolled in school.
The Monthly Housing Allowance (MHA) given to Post-9/11 GI Bill students is an amazing tool to help offset cost-of-living expenses while pursuing higher education, but planning and budgeting can be tricky since it depends on several different and complex factors.
Various life circumstances, academic goals, geographic considerations and financial needs can make the MHA either a plentiful source of monthly income or a drop in the bucket of what your family needs to survive.
Like any major life decision, nothing will take the place of research and planning. Always re-check your numbers and, if all else fails, call the VA and ask.
With that said, here are five tips that should help get you thinking about some of the financial implications of budgeting and living on a Post-9/11 GI Bill stipend.
Determine your needs
It’s always helpful to plan in advance, if possible. There’s nothing stopping you from reassessing your plan on the fly, but by getting ahead of any potential issues, you give yourself the chance to solve stipend-related problems before they happen. One nice element of separation from military service is that it allows veterans flexibility in deciding where they want to go.
If you’re not planning to stay in Japan or are unable to continue living in base housing, you’re going to have to move anyway. If you have a school in mind, you can start crunching numbers and assessing schools months, or even years, in advance. By planning ahead, you give yourself a chance to consider not just the academic factors of your new school, but the financial need related to the place where you’re going to live.
Location, location, location
Speaking of the economics of where you are going to live, it can make an enormous difference on your monthly budget. There are many factors that determine how expensive it is to live in one city versus another, and it’s probably wise to determine whether the MHA paid out for your school is sufficient to cover your expenses.
It’s important to remember that MHA for in-person programs is equivalent to an E-5 with dependents BAH rate in the ZIP code of the school, not for your residence.
Sure, the Honolulu or Manhattan BAH rate looks enticing, but once you consider how much the area costs, it might not seem like such a good deal. For example, MHA in San Francisco is a cool $4,116, which sounds great until you realize that the average one-bedroom apartment in the city is more than $3,600! Compare that to Toledo, Ohio, where the stipend is only $1,191, but a one-bedroom apartment goes for about $480 on average.
That means for San Francisco, you can expect about 86 percent of your stipend to go to rent, compared to only about 40 percent in Toledo. That’s not to say that you should choose Toledo over the Bay Area, just that you should go into it with your eyes open to the fact that it’s not going to be cheap.
If you decide to go out of state for college, the post below is a look at three of the top schools for veteran attendance, and what the regions have to offer:
To work or not to work?
For full-time students, there are two common schools of thought on working while you go to school. The first one is that it’s completely possible to take a normal full-time load of credits and work part time, or even full time, which allows you to complete a degree more or less at the traditional speed.
The other thought is that if you live cheaply and power through credits, you can finish a degree (or maybe more than one) before those 36 months of GI Bill benefits run out. Of course, that doesn’t even take into account the students who attend classes part time, or who simply want to enjoy completing their degree at a more leisurely pace and not working at all. Either way, it’s important to consider the budget implications of those extra classes.
Create a budget and stick to it
This one’s pretty much common sense, right? There are many ways to budget, including all sorts of software, professional services, free online advice, spreadsheets, notebooks, napkins and whatever else you need to track your income and your out-go. The important part is that you create a plan and stick to it.
Even though various circumstances can make living on a GI Bill stipend more or less comfortable, it’s almost never going to be particularly great money. In most cases, it’s going to be noticeably less than what you made on active duty, so be sure to know exactly what you’re going to have and what you’re going to need so you don’t end up looking at a sudden need to add a job the week before finals.
Beware summer break
Here is one area that can trip people up. You only receive a stipend for the days that class is in session. That means if your school wraps up on May 15, you can expect half of your normal payment on June 1. If you only have three days of classes in a month, the next payment will only be about 10 percent of what you’re used to.
What that usually means is lean months at the beginning and end of a semester, since few schools start and end exactly with the calendar, and the potential of several months of no payment in the middle of the year, unless you’re still enrolled full time for summer classes.
For some schools, especially large state universities, this might not be a big deal. For tiny liberal arts schools, there’s a decent chance you’ll struggle to find anything of use and you’ll be stuck trying to piece together a full-time schedule from Intro to Interpretive Dance and Armenian I.
Hey, those classes sound great, but if they don’t fit your degree plan, it’s worth considering whether it makes sense to burn up a couple months of benefits for the sole purpose of getting paid. As long as you’re prepared for it, taking a summer off shouldn’t be a big deal.
Save a couple bucks in the regular semesters or secure a summer job. Like every part of budgeting on the Post-9/11 GI Bill, the important thing is to know what you’re getting into and plan ahead.
Like this post? You can also learn how to use your GI Bill for on-the-job training.
READ NEXT: 2016 Post 9/11 BAH Rates