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68 Main St., Rockport, ME 04856 

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Taking the Plunge: Finding the Right Financial Advice

November 24, 2018

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Financial Peace During an Evacuation

March 21, 2019

 

Michelle Ross, friend of Logbook, has been a part of the Foreign Service family since 2011. Alongside her spouse, she has worked in Chengdu, Kuala Lumpur, Washington D.C., and Caracas. When she isn't working for the embassy/consulate, she can be found with a book or behind her laptop, maintaining her personal blog, In Search of the End of the Sidewalk (www.insearchoftheendofthesidewalk.com).

 

From our first month as a Foreign Service family, we were told that we should expect to be evacuated at some point in our career with the Department. The world is an uncertain place and seems to be getting more so each year. Departures, both authorized and ordered, can happen for a variety of reasons. Some you can see coming for weeks and months in advance- increasing political unrest or a failing government- but others happen in the blink of an eye- earthquakes, floods, and tsunamis being just the tip of the iceberg. Regardless of the reason behind the departure from post, the exodus itself is a stressful time and if you have not prepared, it can be a real financial hardship.

 

While the Department of State is generous in the allowances provided for evacuated officers and families, this money all comes after the initial departure from post and can take weeks to be processed through the system and to hit your bank account. We are a family of two- just my husband who is the officer and myself, the EFM. Our credit card bill the first month we were back in Washington D.C. was over $10,000. When you are in the District or surrounding area looking to put together a month-to-month lease with a quick escape clause, the companies are all aware of the government’s daily housing rates and many of them charge exactly that. Right now, that is $251/night- which comes to over $7500 a month for just our apartment. Then, you have either the initial outlay of money to stock a mini-pantry, or you eat out multiple meals a day, all going onto the card. It is easy to see how a five-digit credit card total is easy to accumulate, and we are just two people. If you have kids, that number is going to go up even faster. Add to that the expenses related to filling in the gaps from what went in your very last-minute suitcase packing. For me, I went from a perfect-weather-everyday post to Washington DC in January. To say that I didn’t have season-appropriate clothing is an understatement. Winter coat, boots, tights, cardigans- it all had to be bought at a crazy Nordstrom Rack run. Multiply that by the number of kids you have and throw in some school supplies and you are looking at a total that outpaces your normal spending habits exponentially.

 

So how does one financially prepare for an evacuation that may or may never happen? There are some simple things that can be done to ensure you and your family are financially ready. First of all, if you are eligible for a government credit card, consider getting one. This is especially true if you do not have a large amount of money in savings. There is a good chance that your first credit card payment is going to come through before your first allowances payment hits the bank account. If your savings cannot cover that initial $10,000 outlay of money, you will be forced to pay interest on those expenses, and the government money does not touch interest payments. If you do have the personal savings to cover a large initial payment and would prefer to put the charges on your own card (points!), be sure that you have an adequate limit on that card. We have a very large limit on our credit card, one that I initially thought was ridiculous and almost turned down, but after putting a medivac on the card a few years ago, realized that what seemed extraneous for our everyday lives in the United States actually became necessary as a Foreign Service family. Keep a decent credit limit available. The last thing you want to do as you are facing the stress of an evacuation is to be on the phone with your credit card company, asking for an increased limit.

 

It took four tours for my family to experience an evacuation. We have been with the Department long enough to have a healthy savings account and have strong lines of credit. If this evacuation had happened on our first tour though, it would have been much more stressful on the financial side of the equation. Knowing early on that government credit cards are a thing and knowing to not turn away the banks offer of a larger line of credit are important pieces of advice that probably will not pop up (or if they do, stick with you) in your initial training courses.  As a Foreign Service family, we have opted for a lifestyle that is not conventional and carries some unique risks with it. Being told to leave your home with only a day’s notice is always on the table, whether you are assigned to a sparkling European capital or a still-developing country in Asia. Being a part of the Foreign Service is rewarding, but it isn’t without the risk of an evacuation, regardless of the posting. Creating a safety net for yourself so that if it does happen, you can pack your bags and say your goodbyes without wondering how you are going to pay for the next thirty days will help to ease your mind and check one of the thousand boxes that are a part of an authorized or ordered departure.

 

Michelle contributed this article in her personal capacity. The opinions expressed in this article are her own and do not necessarily represent the views of the Department of State or United States Government. 

 

“Investment advisory services are offered through Logbook Financial Planning, LLC, a Licensed Investment Adviser in the state of Maine and Registered Investment Adviser in the state of Virginia” “All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.” “Logbook Financial Planning, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.”

 

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