Military deployment can raise any number of questions an active duty soldier can't readily answer. There's no telling when you may be called to serve, where, for how long, or if you'll be placed into combat. For many servicemen and women, it can also mean leaving a family back home for extended, indefinite periods of time.
One of the most important things a deployed service member has to consider is if their family is financially secure and prepared while you're on a tour of duty. Is your current savings account enough of a safety net? Are all your affairs in order, including a last will? How about insurance policies? What about special military family benefits?
Here are a few money management tips to consider if you're being deployed:
Set goals and budget accordingly. You may realize that you or your spouse have never sat down to figure out a budget. Now's the time to start. If you've been assigned to a six-month deployment, ask yourselves how much money will your household need to live on for that period. If you have other expenses like landscaping or dry cleaning, in addition to necessities like groceries, utilities, and childcare, prioritize your finances to see what you can and can't live without for a few months. For emergency expenses, experts recommend a reserve of around $2,000. Setting up programs like automatic bill pay can help ease the trouble of keeping up with due dates of bills.
The Military Wallet suggests that you may want to consider appointing a power of attorney to a family member you'd like to be in charge of finances while you're gone. However, this can come with certain restrictions; consult with your Judge Advocate General's Corp office.
Ensure you're insured. A good life insurance policy is absolutely essential if you've been deployed and leaving family behind. Military Wallet says to check with your policy provider that your contract doesn't include a clause stating your family won't be paid benefits if you're killed in action. It's a terrible thing to consider, but necessary for your family's financial future. Do you have traumatic injury protection? A power of attorney may also be helpful in deciding who'll make your healthcare decisions if you cannot. At this time, make sure your last will and estate plan is also up to date and in order.
Also, check other insurance policies in your name--is there a car, for example, you won't be driving while you're deployed? If so, you could temporarily cancel insurance on items that won't be in use, saving you and your family money. If you're single, the Military Connection website even suggests placing your belongings in storage and paying rental insurance, saving you the cost of rent on an entire apartment.
Special military programs. You may be able to take advantage of services offered specifically for deployed service members. Some, like the Servicemembers Civil Relief Act, may offer you or your family a break on things like apartment leases, or delay civil proceedings. Through special considerations, the deployed military service member may also qualify for lower rates on mortgage or auto loans, or even credit cards, too. Regardless, it's best to check with your creditors about any and all breaks they can offer you during your deployment.
If you're being deployed, check with organizations like the PenFed Credit Union for their savings and loan rates. If it's a mortgage you're fronting, you could qualify for special programs like the credit union's Dream Makers Grant, available to all active duty service members.
Investments and additional income. There's a program called the Savings Deposit Program (SDP) that you may qualify for. The Military Times says that service members deployed to designated combat zones may be eligible to deposit as much as $10,000 of their unalloted pay and allowances into the SDP. Additionally, check for other sources of income you may have coming. The Times says your family may be entitled to Family Separation, Imminent Danger, or Hardship pay. Once you've confirmed that extra pay, the publication says to consider how your family can use that extra cash flow-- the Combat Zone Tax Exclusion may apply.
Separate but equal. In the case of a military deployment, one can't understate the need for joint accounts between you and your spouse. Setting up separate accounts in your name, and your husband or wife's name, allows your spouse to easily take care of expenses while you're away. This can clear up confusion over money matters and makes managing your finances easier for the whole family. It's bad enough to deal with the stress of a high-risk deployment-- don't let your family fall into debt over a money discrepancy.
Active duty deployment means you're serving your country when it matters most. It's an assignment that any enlisted soldier can be proud of. It can be both an exciting, yet uncertain opportunity. Deployment is hard enough that worrying about your family's finances shouldn't be a cause for concern. By following these simple tips as a start, you can make sure that your affairs, your money, and your future as an active duty service member are in order.
Paul Sisolak writes for www.GoBankingRates.com, which provides readers informative personal finance and investing content, as well as the best interest rates on financial services nationwide.
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