Deploying for military service can bring about a whirlwind of emotions and responsibilities. Amidst the chaos, managing your finances may seem challenging. But fear not! In this article, we will explore effective strategies on how to manage finances during military deployment. We understand the importance of maintaining stability and control over your monetary affairs while serving your country. So, whether you’re a first-time deployer or looking to refine your financial management skills, this guide is here to support you every step of the way. Let’s dive in and learn how to navigate the financial landscape during your military deployment.
How to Manage Finances During Military Deployment
Introduction
Military deployment can be a challenging time for service members and their families. Apart from the physical and emotional toll, there are also financial considerations to take into account. With careful planning and management, it is possible to navigate through the financial challenges of military deployment. In this article, we will discuss various strategies and tips to help service members effectively manage their finances during deployment.
Maintain a Budget
One of the most important steps in managing finances during military deployment is creating and maintaining a budget. A detailed budget can help service members track their income, expenses, and savings goals. Here are some steps to take when establishing a budget:
- Assess your income: Start by determining your monthly income, including base pay, allowances, and any additional income sources.
- List your expenses: Make a comprehensive list of all your monthly expenses, including rent/mortgage payments, utility bills, insurance, food, transportation, and debt payments.
- Identify savings goals: Consider your financial priorities and set aside money for savings, emergency funds, and future expenses.
- Track your spending: Keep a record of your everyday expenses to identify areas where you might be overspending or where you can cut back.
- Adjust as needed: Regularly review and adjust your budget to ensure it aligns with your financial goals and changing circumstances.
Automatic Bill Payments
During military deployment, it can be challenging to keep track of and pay bills on time. Setting up automatic bill payments can be a time-saving and stress-reducing solution. Here’s how to get started:
- Contact service providers: Reach out to your utility companies, insurance providers, lenders, and any other organizations you have bills with. Inquire about automatic payment options.
- Set up automatic payments: Provide the necessary information, such as your bank account details, to authorize automatic bill payments. Some service providers may offer online portals for easy setup.
- Monitor transactions: Regularly review your bank statements to ensure that all automatic payments are being processed correctly and to check for any unauthorized charges.
Appoint a Power of Attorney
When you’re deployed, having a trusted person appointed as your power of attorney can be immensely helpful in managing your finances. This individual can assist in making financial decisions and taking care of your financial matters while you’re away. Here’s what you need to know:
- Choose a reliable person: Select someone you trust implicitly to act in your best interest. This could be a spouse, family member, or close friend.
- Grant limited or general power of attorney: Determine the scope of authority you wish to grant. Limited power of attorney allows the appointed individual to handle specific financial matters, while general power of attorney provides broader control over your finances.
- Work with a legal professional: Consult with an attorney to draft a power of attorney document that meets your specific needs and state regulations.
- Keep important documents safe: Ensure your appointed power of attorney has access to necessary documents, such as bank account information, insurance policies, and any other relevant financial paperwork.
Communicate with Financial Institutions
Before deployment, it’s essential to inform your financial institutions about your upcoming military service. Maintaining open lines of communication can help prevent any issues or misunderstandings. Here are some important points to consider:
- Notify your bank and credit card companies: Inform them about your deployment dates and provide them with a reliable point of contact, such as your power of attorney or a spouse.
- Inquire about special benefits: Some financial institutions offer benefits for military members, such as reduced interest rates, waived fees, or special deployment accounts. Take advantage of any offers that might be available.
- Set up automatic transfers: Consider automating transfers to savings accounts or other investment vehicles to ensure consistent savings growth during your deployment.
- Protect against fraud: Request increased security measures, such as setting up alerts for suspicious activity on your accounts, to safeguard your finances while you are away.
Review and Adjust Insurance Coverage
Military deployment may impact your insurance needs. It’s important to review your policies before deployment and make any necessary adjustments. Here’s what you should consider:
- Health insurance: Verify that your health insurance coverage is comprehensive and appropriate for your needs during deployment. Explore options for family members as well.
- Auto insurance: Discuss your deployment with your auto insurance provider and inform them of any changes in usage patterns. You may be eligible for a reduced premium since your vehicle will be in storage.
- Renter’s or homeowner’s insurance: Evaluate your coverage and ensure it adequately protects your property while you’re away. Consider adding additional coverage if needed.
- Life insurance: Assess your life insurance policy and beneficiaries. If necessary, make any updates to reflect changes in circumstances.
Utilize Deployment Savings Opportunities
While military deployment comes with its challenges, it also presents opportunities for savings and financial growth. Here are some strategies to consider:
- Combat Zone Tax Exclusion: If your deployment takes you to a designated combat zone, take advantage of the tax benefits available. This exclusion allows you to exclude your income earned in the combat zone from federal and sometimes state income taxes.
- TSP Contributions: The Thrift Savings Plan (TSP) is a retirement savings program for military members. Consider maximizing your contributions during deployment, as this can help accelerate your retirement savings.
- Deployment Savings Account: Some financial institutions offer specialized accounts for military members called deployment savings accounts. These accounts may offer higher interest rates or other perks, making them ideal for saving during deployment.
- Investment Opportunities: Explore investment options that align with your risk tolerance and financial goals. Consider consulting with a financial advisor who specializes in military finances for personalized guidance.
Keep Track of Financial Responsibilities
Although your primary focus during deployment is your mission, it’s important to stay on top of your financial responsibilities. Here are some tips to help you manage your finances effectively:
- Sign up for electronic statements: Opt for electronic statements instead of paper statements to ensure you receive and review your financial information promptly.
- Monitor accounts regularly: Access your online banking and investment accounts regularly to check for any discrepancies or fraudulent activities. Report any suspicious transactions immediately.
- Create an emergency fund: Building an emergency fund is crucial for unexpected expenses. Strive to put aside at least three to six months’ worth of living expenses in case of emergencies.
- Continue saving for retirement: Maintain your retirement savings contributions, even while deployed. This consistent effort will help secure your financial future.
- Stay informed: Familiarize yourself with military-specific financial resources, such as the Military Saves campaign and financial readiness programs offered by your branch of service.
Managing finances during military deployment requires careful planning, communication, and proactive steps. By creating a budget, automating bill payments, appointing a power of attorney, and staying in touch with financial institutions, service members can navigate the financial challenges of deployment more effectively. It is vital to review insurance coverage, take advantage of deployment savings opportunities, and remain diligent in tracking financial responsibilities. With these strategies in place, service members can maintain financial stability and work towards their long-term financial goals even while deployed.
Life Hacks For Your First Military Deployment
Frequently Asked Questions
Frequently Asked Questions (FAQs)
How can I manage my finances during military deployment?
Managing finances during military deployment can be challenging, but with proper planning and the right strategies, you can ensure your financial well-being. Here are some tips to help you manage your finances:
What should I do before deployment to prepare my finances?
Prior to deployment, it’s essential to take certain steps to prepare your finances. These include:
Should I give someone power of attorney for my finances?
Granting power of attorney to a trusted individual can be a wise decision when you’re deployed. It allows them to handle financial matters on your behalf. Here’s what you need to know:
How can I set up automatic bill payments while deployed?
Setting up automatic bill payments can help ensure that your essential bills are paid on time, even while you’re deployed. Here’s how to do it:
What should I do about my credit cards while on military deployment?
Managing your credit cards is crucial during military deployment to avoid unnecessary fees and maintain a good credit score. Consider these steps:
How can I budget effectively during my deployment?
Budgeting is essential for managing finances during military deployment. Follow these steps to create an effective budget:
What resources are available to help me with financial management during deployment?
Several resources are available to assist military personnel with financial management during deployment. Take advantage of the following:
Should I utilize the Servicemembers Civil Relief Act (SCRA) during deployment?
The Servicemembers Civil Relief Act (SCRA) provides certain protections and benefits to military personnel. Here’s how it can help you during your deployment:
Final Thoughts
When it comes to managing finances during military deployment, proper planning and organization are key. Start by creating a budget that accounts for both regular expenses and any additional costs that may arise. Keep track of your spending and make adjustments as needed to stay within your means. Take advantage of military-specific financial resources, such as military banks and support programs. Prioritize saving for emergencies and long-term goals, such as retirement. Stay informed about your financial benefits and entitlements to maximize your financial stability. By adopting these strategies, you can effectively manage your finances during military deployment.
