New BAH Rates!

Santa may have brought gifts on December 25th, but a much-needed boon arrived on January 1st with higher Basic Allowance for Housing (BAH) rates for 2023. BAH rates for the new year are usually announced mid-December but go into effect on January 1st of the following year. BAH is money military members receive to pay rent or a mortgage. The amount you receive depends on your rank, where you are assigned station-wise, and if you have dependents. 

The baseline BAH for each location is formulated across the country considering living expenses, rent, and utilities. As housing has continued to rise alongside interest rates, many military families have found themselves between a rock and a hard place. BAH is intended to cover 95% of a military member’s housing expenses, including rent and utilities. For some, previous BAH rates didn’t match rents and forced them to choose between moving into a home that didn’t fit all of their needs or paying out of pocket to find one that did. Some bases in places like Florida, California, and Colorado struggled more with the rate discrepancy than others over the last few years.

This practical raise will hopefully allow families some wiggle room to select housing in good condition and near where they need to work.  

291 of the 300 military housing areas will have rates that rise, and the other eight will stay the same or lower. Altogether this is the most significant increase that military members have seen in over a decade. The DOD shared in their press release, “An estimated $26.8 billion will be paid to approximately one million Service members. The significant increase in average BAH rates is reflective of the unique market conditions experienced across many locations nationwide over the past year.”

Stateside military members are allowed to pocket whatever BAH is left over if they choose to live in a place that is less than their given BAH amount. Check your finances to see how this year’s BAH rate change will impact you and how you can adjust, save, and plan for the future accordingly. 

You can use this calculator to look up what BAH looks like for your zip code within the United States, with and without dependents. Remember that your BAH is where you are assigned, not where you live. In situations with year-long Short-Tours, where dependents may move to be closer to family, your BAH will not adjust. Each case is different, and BAH will also shift with divorce or a change of dependents. 

Although many are celebrating this significant BAH hike, check with your financial advisor before committing to the home you’ve had your eye on to ensure you know what your BAH and finances look like for the year ahead.

This article is sponsored by Armed Forces Bank. Offering military members full-service banking since 1907. Armed Forces Bank knows military members have different needs. They pride themselves on offering diverse banking solutions. If you’re stationed anywhere in the world, you need banking that’s convenient for you and your family. Banking that works when you need it!

Written by Aj SmitAj Smit is the author of the book Red Thread: Weaving an Embodied Life of Joy, speaker, glitter enthusiast, and professional weaver of Joy. She is a military spouse in S. Korea with a pup and houseplants galore. Aj has led various Red Tents, retreats, and workshops internationally over the last ten years to help others discover how to weave creativity and curiosity into their lives. You can find her on Facebook and Instagram at @TheJoyWeaver and TheJoyWeaver.com