When planning a Permanent Change of Station (PCS) to Hawaii, there are many financial considerations to keep in mind.

One important aspect that complements your Basic Allowance for Housing (BAH) is the Cost of Living Allowance (COLA).

Hawaii's high cost of living can be a challenge, but COLA, along with BAH, can help ease the financial burden of relocating to paradise.

What is COLA?

Cost of Living Allowance (COLA) is a non-taxable benefit provided to offset the cost of living in high-expense areas, such as Hawaii.

COLA is specifically intended to cover non-housing-related expenses, such as groceries, utilities, transportation, and other daily necessities that are typically more expensive in areas like Hawaii compared to the continental U.S.

For more details on current COLA rates, visit the Overseas COLA Rate Lookup.

Why is COLA Important for Military Members in Hawaii?

Hawaii is one of the most expensive places to live in the United States.

The high cost of goods and services, along with increased costs of importing almost everything, makes day-to-day living more expensive.

While BAH covers housing expenses, COLA helps with other essential costs, making it an essential benefit for military members and their families adjusting to life on the islands.

For those stationed in Hawaii, COLA ensures that the cost of essentials like food, fuel, and utilities doesn’t eat into your base pay.

This additional support allows service members to maintain a similar standard of living that they would enjoy in lower-cost regions.

How is COLA Determined?

COLA is calculated based on several factors, including:

• Duty Station Location: The allowance varies depending on where you are stationed in Hawaii. For example, Oahu might have a slightly different rate compared to other islands.
• Rank and Pay Grade: Your rank will influence how much COLA you receive, with higher-ranking service members typically receiving a higher allowance.
• Dependent Status: Whether you have dependents or are single affects your COLA amount. Those with dependents may receive a higher COLA to account for the additional costs of supporting a family.

The Department of Defense updates COLA rates regularly to keep pace with inflation and changes in the local economy, ensuring that service members receive a fair allowance that meets their needs.

Using COLA to Your Advantage

COLA is meant to help offset the increased costs you face while living in Hawaii. Here are a few ways to make the most of your COLA benefit:

1. Plan Your Budget Wisely: While COLA helps with daily expenses, it’s still important to budget effectively. Understanding how COLA works and planning for the cost of living in Hawaii will help you avoid financial surprises.
2. Consider Transportation Costs: Fuel and transportation can be significantly more expensive in Hawaii. Use your COLA to account for these costs, especially if your commute is long or involves travel between islands.
3. Shop Smart for Groceries: Groceries in Hawaii tend to be costly since much of the food is imported. Using local resources like farmers' markets can help save money, and COLA can help bridge the gap for those essential purchases.

COLA vs. BAH: How They Work Together

BAH and COLA serve different purposes but work together to help cover your living expenses.

BAH is specifically designated for housing-related costs, whether you decide to live on-base or off-base.

On the other hand, COLA is meant to supplement your income to help with the extra costs associated with living in an expensive location.

For a deeper understanding of Hawaii BAH, visit What is Hawaii BAH?.

By understanding and effectively using both of these benefits, you can mitigate some of the financial challenges that come with relocating to a high-cost area like Hawaii.

Together, BAH and COLA can make your transition to island life smoother, allowing you to focus on your mission and enjoy what Hawaii has to offer.

Final Thoughts

Adjusting to life in Hawaii comes with its challenges, especially when it comes to managing finances.

Fortunately, with BAH and COLA, military members can afford to live comfortably and enjoy their time on the islands without worrying about excessive costs.

Planning ahead, budgeting wisely, and fully utilizing both BAH and COLA can help ensure that your PCS to Hawaii is a rewarding experience for you and your family.