For some military families, a deployment can complicate the household budget. Your spouse might have unusual expenses or receive special pays and entitlements before, during and after a deployment. But staying "fiscally fit" while your spouse is deployed just takes a little extra effort. By paying attention to changes in expenses and income and following these tips to keep spending in check and grow your savings, you can make sure your spouse's deployment doesn't throw your finances off track.
Your spouse's deployment entitlements
If you know and understand your spouse's deployment pays and entitlements, you'll be in a much better position to create a budget and stick with it. Deployment entitlements may include Family Separation Allowance, the Combat Zone Tax Exclusion, Hostile Fire/Imminent Danger Pays and Hardship Duty Location Pay. If your spouse is deployed for more than 30 days, he or she will be eligible for certain entitlements. If your spouse is on a combat deployment, short or long, depending on the unit, your spouse will receive other compensation for hardships. Be sure to use this extra money wisely - for instance, to pay down debt and to save with the Savings Deposit Program available during combat deployments.
Be sure to go to MyPay to check your spouse's Leave and Earning Statements. You'll need your spouse's Social Security number and password to access the LES, so make sure you get this information before the deployment. And remember to keep security in mind when using your spouse's PIN to access financial accounts.
Stay in control of your finances during deployment
Juggling bills that you may not ordinarily see can be nerve-racking. If you prepare before the deployment, it will be easier to get into a simple routine during deployment.
Here are some ways to keep your bills in check:
- Discuss the bills before your spouse leaves. Make a list of all of your combined bills and when they're due. Are any bills paid through automatic checking? Which bills do you need to pay with a check? Also make sure that you have the necessary powers of attorney in place in case you have to make a purchase on behalf of your service member. (Your Legal Assistance Office can help with this.)
- Don't overspend before the deployment. Make a budget for deployment spending. Be sure not to go overboard with electronics and equipment that you don't need.
- Keep an ongoing checklist of your bills. Check your bank statement regularly to make sure that checks are clearing on time. If you need help balancing your checkbook, ask for help at your Family Support Center.
- Always keep some extra money in savings. Make sure you keep some extra savings for emergencies, even if it's just a few dollars from each paycheck. Through the Military Saves program, you can find out how to set savings goals, put them in writing, and stick to them.
- Live off your pre-deployment income. Sometimes extra pay means you have more income than you did before your spouse was deployed, and you may be tempted to spend more. Instead, try to live off of your usual pre-deployment combined income and use any extra income to pay down debt or put more into savings.
Take advantage of extra savings during deployment
The Department of Defense (DoD) offers unique savings plans during deployment. If you take advantage of these higher-rate savings you can build a nice nest egg for your family.
- Thrift Savings Plan (TSP). If you don't invest regularly in the Thrift Savings Plan, definitely start during deployment. You're not likely to miss the money coming out every month and you'll enjoy the benefits later on.
- Roth TSP Investments. Traditionally, participants invest pre-tax dollars into their TSP accounts. With the Roth TSP, participants have the option to make Roth contributions, which allow participants to invest after-tax dollars into their TSP accounts too. When you withdraw funds from your traditional TSP, you will have to pay taxes on the money, as well as the earnings it has accrued. With Roth contributions, you have already paid taxes on the money, so you can withdraw it tax-free, along with any earnings it has accrued, as long as meet you meet certain requirements. Check out our article on Roth TSP Investments for more information.
- Savings Deposit Program. At the very high rate of ten percent interest, the Savings Deposit Program is an excellent way to grow your savings. The program is only available during deployment.
- Your Military Star Card offers special lower interest rates during deployment. Make sure you or your spouse contacts your Exchange Credit Services before the deployment. If you have other credit cards with a very high interest rate, look at the Servicemembers Civil Relief Act. For more information, contact the Legal Assistance Office on your installation. For an informative info graphic about credit cards, visit Consumer Financial Protection Bureau Know Before You Owe: Credit Cards.
Homecoming and overspending
Homecoming is an exciting time, and it can be tempting to overspend when you celebrate. So be careful - otherwise you may be paying the price for a long time. Here are some ways to keep your homecoming debt free:
- During the deployment, set some of your savings aside for a special occasion. Even $50 a month adds up.
- Visit your installation travel office for special post-deployment deals. Also, if you're going to a family resort, be sure to ask whether special rates are available for service members returning from deployment and their families.
- Shop at your installation Exchange and Commissary for post-deployment celebrations. The tax break and special sales can save you a bundle.
- Put some of your money where you can't get to it. If you have some extra money each month, ask your financial institution about the possibility of investing a small amount each month. This is your best option for "hiding" your money so you won't be tempted to spend it, which means that you'll have some extra cash later on.
To find out more about controlling spending, listen to the podcast Taking Control of Your Cash. Check out the podcast Avoiding Payday Loans to avoid being the next victim to high interest loans in exchange for short-term relief. Sticking to a spending plan and saving even small amounts can make a huge difference to your fiscal health during deployment.