12 Easy Ways to Manage Your Finances Before, During, and After a Military Deployment
Anyone serving in the armed forces can tell you that returning from a deployment can be just as traumatic in many ways as leaving. Re-finding your role in the family dynamic, returning to the office if you are a reservist with a civilian job, and even readjusting to mundane things like stopping at red lights can be a challenge.
One area where it's particularly important to hit the home turf running is finances. A deployment can create both financial challenges and — potentially — advantages for a family, but you need to know how to handle them properly to keep the homefront strong. (See also: Best Credit Cards for Military Families)
I spoke with American Armed Forces Mutual Aid Association Chief Operating Officer Michael Meese about the financial steps military families should take before, during, and after a deployment. AAFMAA provides insurance and other financial services to the US military community.
Before
"First, they need to plan before they go to minimize the challenges when they come back," Meese says. After a 32-year Army career that involved several deployments, Meese has been able to advise many younger service members on this, including his own son, who served in Afghanistan.
1. Stash Cash in the Savings Deposit Program
Only available to service members deployed in combat zones, this Department of Defense program pays up to 10% interest — 10 times the going rate for a one-year certificate of deposit. You can't actually start depositing money into this account until you have been deployed, but you should figure out before you go if you have the spare money to take advantage of it, or if you can have part of your pay deposited into it while deployed.
2. Learn What Other Financial Benefits You May Qualify For
The Soldiers and Sailors' Civil Relief Act protects your family from eviction during your deployment and limits the interest you pay on your mortgage and some other debts to 6%. Contact creditors in writing to request interest rate reduction, and include a copy of your orders.
3. Buy More Insurance
When Meese's son was deployed to Afghanistan, Meese recommended that his son buy life insurance in addition to the $400,000 that service members are automatically signed up for. AAFMA has a life insurance calculator that helps determine how much coverage you might need.
4. Plan for Your Financial Absence
If you are the person who typically pays the bills, make sure your spouse has a list of monthly bills, passwords to bill pay accounts, etc. If your unit offers a class on reading the monthly Leave and Earnings Statement (the military's version of a pay stub) — both the service member and spouse should take it.
Agree together what accounts or credit cards will be used to make what payments, and determine a monthly budget. If you are single, you may have to set all bills on autopay and deputize a family member to keep an eye on things for you. Even if you have Internet access while deployed, Meese warns, it can sometimes be difficult to log into online banking from overseas.
Ideally, you can save money while you are deployed by canceling services that you won't use during your absence.
"When I deployed, I turned off my cell phone and I called my insurance company and said I'm not driving my vehicle for a year," Meese says.
During
Depending on the type of deployment, a service member might be kept in the loop via the Internet and phone calls, or may be completely out of touch. So during this time, a lot of the responsibility falls on the spouse or other family members.
6. Monitor Your Leave and Earnings Statements
You should start receiving hazardous duty incentive pay and a Family Separation Allowance 30 days after you enter a combat zone. You or your deputy at home can check the LES online, and if the extra pay doesn't appear, visit your finance office or administrative unit for help.
7. Avoid Overspending
"Families sometimes go into retail therapy when the service member is deployed," Meese says. It's important to stick to the agreed-upon budget so that the service member doesn't come home to surprise debt.
8. Be Sensitive About Sharing Information
It can be great for a service member to stay involved in day-to-day financial decisions via Skype and other technology — or it can be a stressful distraction.
Meese raises an example of a call a soldier might receive: "The washing machine broke, where should we get the money to do that?"
"They may not be in a position to talk about that," Meese says.
For example, while Meese's son was in Afghanistan, his daughter-in-law received a notice from the Internal Revenue Service that the couple owed $2,000 on a past year's tax return. When she spoke to her husband, he was upset about a company member's injury, and she decided not to bring the matter up. She was able to figure out, with help from Meese, that the tax bill was an error, and next time she spoke to her husband, when he was less stressed, she let him know that it was all taken care of.
After
When you finally get home, after hugging your family, it's time to "settle up your finances to make sure you put them back in order, if they got out of order."
9. Ease Back Into Family Finances
Putting the financial house in order should be a joint project between you and your spouse, not a matter of the returned service member taking over. This tip is more about preserving family harmony than about money.
"You can't just jump in and take charge after somebody's been running things very well for six or 12 months," Meese says.
Don't expect that your spouse has made the exact same decisions you would have.
"Any two individuals will be different, and may have spent money on things you wouldn't have. That may cause conflict between couples," Meese says.
10. Get What's Coming to You
While you're overseas, you'll be accruing a $3.50 per day allowance for incidental expenses. You claim this when you return by submitting your travel voucher showing your days overseas, and you'll get your allowance for all the time you were gone as a lump sum.
"Some people just fail to do that, and don't get that entitlement, which over a year is well over $1,000," Meese says. When he returned from his first tour in Bosnia, he used his allowance and other deployment-related funds to take his family to Disneyland.
11. Again, Don't Overspend
"It can be tempting to celebrate your return with dinners out or special gifts," Military.com warns in an article about returning from deployment. After all, between the travel allowance, Savings Deposit Program, and other benefits, you may have a significant amount of cash suddenly available. If you are single, you may not have had to spend any of the pay you drew while overseas.
When he took the family to Disney, Meese recalls, "I felt I had this giant largess, and you can blow through that quickly because you feel like it's a huge amount of money."
Meese obviously isn't against taking a celebratory trip, but he urges wise spending: "What we advise service members is, it is a lot of money and it's great to take care of your family. But a good way to do that is to jump start a college fund or make a down payment on a house."
12. Play Catch Up
If you took advantage of deferred tax return filings, file your taxes now. If the family accrued debt during the deployment, now is the time to pay it off or consolidate it onto a lower interest rate. Continue to check your LES to make sure hazard pay and other allowances stop after you return — if they don't, you will probably end up having the money taken out of a future paycheck when you're not expecting it.
It's understandable that you may not have kept up to date on everything while overseas. Now's the time to make up for that.
"It's all part of cleaning up the battlefield," Meese says.
Have you ever had to manage the finances while a spouse was deployed?
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