The Basic Allowance for Housing, or BAH, is a stipend given to military personnel that do not live in base housing. The amount allotted for an individual BAH is determined based on a number of factors including: location, dependents, and pay grade. There are several extenuating circumstances that may also affect the BAH, but these are the exception to the rule. Remember, the BAH is in addition to base military pay. BAH is essentially provided to pay for basic housing.
For example, a person with the rank of E-1 without dependents living near Travis AFB would receive a BAH of $1226.00 and with dependents $1565.00. That same person with a rank of O-7 would receive $2160.00 without dependents and $2393.00 with dependents. This shows the fairly substantial difference rank can make. An equally substantive difference can be seen between high population centers with higher costs of living and bases located in rural areas with a lower cost of living.
Remember, the BAH is intended to be used just for housing, either rent or a mortgage. However, it does not have to all be used on housing. For individuals or families who have extensive bills, some of the money may be better used by paying off pre-existing bills. Let’s say the individual with a $1200 BAH has credit card debt, student loans, or is saving for a wedding. He or she could choose to share an apartment or house with a roommate and use only a portion of their BAH on housing and use the remainder for other priorities.
This can work for any individual or family. When looking for housing don’t necessarily look for what you can afford, rather look for what best suites your needs. Just because it is possible to rent or buy a four bedroom house doesn’t necessarily mean you have to. Instead look for the least expensive option that will adequately, not extravagantly meet your needs. This way, the additional money from the BAH can be used in the family budget where it is needed most. By learning how to maximize both miltary pay and BAH, you will be able to accomplish financial goals with greater efficency.