Financial Management

Counseling covers financial issues such as basic budgeting, money management, debt consolidation (including coaching to help people contact their creditors and negotiate late fees, interest rates and affordable payment plans) and assistance with housing issues (being behind on mortgage payments or facing potential foreclosure).

The National Foundation for Credit Counseling can also help you develop a debt-management plan for free. Should you choose to enter into an arrangement with NFCC to manage a debt-management plan on a long-term basis, a nominal monthly fee may apply.

The sessions are available for free to active-duty, Guard and reserve members (regardless of activation status), and families located in CONUS. Up to 12 counseling sessions per issue, per calendar year, are allowed for each person.

The goal of short-term, solution-focused counseling is to help individuals change by creating solutions rather than dwelling on problems. Using this same strategy, short-term, solution-focused financial counseling helps people identify their issues and then work to identify realistic resolutions.

Contact Military OneSource at 800-342-9647 and ask for it. You must go through Military OneSource in order to access the sessions for free.

Military OneSource offers telephonic counseling with certified financial planners who will help you review your options. While they can’t tell you which plan is the best fit for your personal situation, they will educate you on the types of plans available, describing the advantages and disadvantages of each.

Financial counseling can assist with basic money management. Financial planning (telephonic counseling with certified financial planners) can help with reviewing savings plans, investing plans, stocks, bonds and retirement plans. Financial planners can help inform you about the advantages and disadvantages of different savings plans and methods, but they won’t provide advice or recommend one over the other.

For those who are unable to attend in-person counseling or are in locations where in-person counseling is not available, Military OneSource will provide telephonic counseling.

In-person financial counseling is available in most locations through Military OneSource, in partnership with the National Foundation for Credit Counseling. NFCC, a nonprofit national agency, provides financial education and counseling services at hundreds of local offices nationwide.

Military OneSource must arrange for you to meet face-to-face with a financial consultant in your community for you to receive the service for free. NFCC does not provide coverage throughout the entire CONUS. Providers are made up of local consumer credit agencies that must pass a certification exam to participate in this program.

Telephonic financial counseling is provided by the financial management team located within the Military OneSource call centers. This team is made up of highly qualified AFC-certified financial counselors.

Visit the National Foundation for Credit Counseling website. Enter your ZIP code in the search engine to find the local agencies in your area. Contact those local agencies for employment opportunities.

No. The internal financial counselors and National Foundation for Credit Counseling counselors do not sell or promote products or agendas. NFCC is a national, nonprofit organization that does not sell or promote products. The only cost you may incur is if you decide to personally hire a local NFCC agency to manage your debt-management plan as part of a long-term arrangement. There is a nominal monthly fee for this service.

It’s no secret that military pay is a bit more complicated than a typical nine-to-five job, and when you deploy there are even more factors added to the mix. Taking the time to understand what you earn today and how your pay could change will put you and your loved ones on solid financial footing while you are deployed.

Revisit the basics of your pay today.

• Leave and Earnings Statement: This essential piece to understanding military finance shows your monthly income and leave totals. Use MyPay to access current and past LESs as well as allotments.

Revisit where your money is going.

• Pay distribution and allotments: Because your pay and allowances are delivered through direct deposit, it’s important to know where this money is going. Your allotments are automatic distributions of a portion of your pay that can be used to:
  • Deposit money into bank accounts
  • Make rent or mortgage payments
  • Pay insurance premiums
  • Contribute to investment products like EFTs or bonds
  • Make charitable contributions to the Combined Federal Campaign, Army Emergency Relief, Navy and Marine Corps Relief Society, or affiliates of the Air Force Aid Society

Take the time to understand your allotments and discuss them with your loved ones to avoid any confusion during your deployment.

Determine any additional pay you may be earning.

• Special and Incentive Pay: The biggest change that most service members see when deployed is the addition of special and incentive pay. S&I pay is used to compensate for dangerous or hazardous duty assignments or conditions. Currently, there are more than 60 types of S&I pay authorized by law. Learn more about the most common types of S&I pay. Then find out which ones are applicable to your deployment to understand how much your income will change.
• Family Separation Allowance: If you are away from your dependents for more than 30 days, you may also be entitled to family separation allowance under certain conditions. The allowance is $250 per month, beginning on the day of departure and ending on the day prior to your return home.

Note: There can be a delay in receiving these extra pays. So you can plan for how you will use the pay once it starts, but don’t change your budget until then.

A financial plan will help you and your loved ones manage household finances while you’re away and set you up for success upon your return.

Understand how you spend your money.

• Document the predictable: The easiest way to start this process is to think about the expenses that you have every month – like rent, car payments, insurance or streaming services.
• Categorize the less predictable expenses: Take a look at a couple of months’ worth of bank and credit card statements. How much did you spend per month on items like food, transportation, entertainment and utilities?
• Review the results: After looking at your list of expenditures, determine where you might be able to tighten your belt. Are you splurging on entertainment or food? You can look for ways to save here and there but don’t be too harsh on yourself. It’s important to make sure you understand not just your spending habits today, but how those spending habits will change while you are deployed.

Decide where you want to go financially.

Your deployment may come with a change in your income, so it’s important to set some goals for where you want to be financially during your deployment and when you return. Do you want to save up for a major purchase, put more toward your retirement or maybe pay off some debt? Use this savings goal calculator and the My New Money Goal worksheet to help you plan.

Check your credit.

It’s important to review and monitor your credit while you’re deployed to help you stay on top of your finances, and watch out for any fraudulent activity. The following links can help:

• Monitor Your Credit infographic – provides helpful information and contacts for credit monitoring
• Operation Monitor Your Credit – short article with credit monitoring information
• Annual Credit Report website – offers free credit reports

Note: Service members can also freeze their credit during deployment. Learn more about how to freeze your credit and reduce identity theft.

Think about your taxes.

Your deployment will likely have some sort of impact on your taxes, so take the time to understand what this may mean when filing taxable income.

• If you are stationed abroad or are in a combat zone during the tax filing season, you may qualify for certain automatic extensions related to the filing and paying of your federal income taxes.
• If you are earning combat pay, it may be nontaxable.
• The IRS has a dedicated resource to help military members make accurate and informed tax decisions. Learn more about MilTax: Tax Services for the Military.

Whether it’s from family separation allowance, S&I or tax-exempt combat pay, you’re probably going to have a little extra money at your disposal during your deployment. While it might be tempting to use all that money on something splashy, it may be more helpful to put some of it away for the future. The good news is that there are a lot of tools at your disposal to make the most of those savings, including:

• Thrift Savings Plan: This is an official federal government-sponsored retirement savings and investment program, similar to a civilian 401(k) tax-deferred program. Service members can contribute money from their basic, special, incentive and bonus pay without paying federal or state taxes. Service members deploying to combat zone tax exclusion areas may also qualify to contribute additional funds into their TSP account, beyond the yearly IRS contribution limits. However, service members under the Blended Retirement System need to plan out additional contributions to continue to maximize government matching contributions.
• Savings Deposit Program: This is available to service members during assignments and deployments to specified locations. It pays back a 10% annual return on investment (2.5% quarterly) on up to $10,000 contributed from unallotted current pay and allowances. Upon withdrawal, a service member’s contributions to the Savings Deposit Program will not be taxed, but the interest earned will be. Remember that the interest stops accruing and the funds need to be withdrawn 90 days after deployment ends.

The Servicemembers Civil Relief Act provides financial and legal protections for active-duty service members, including National Guard and reserve members, and their families. Taking the time to understand these protections can help you and your loved ones avoid some financial pressures during deployment. A few of the financial protections that may apply during your deployment include:

• Reduced interest rates: Creditors must reduce the interest rate on debts to 6% for liabilities incurred before you entered active duty. If the debt is a mortgage, the reduced rate extends for one year after active military service. The reduced interest rate applies to credit card debts, car loans, business obligations, some student loans and other debts, as well as fees, service charges and renewal fees. Creditors can challenge this provision if they believe your ability to pay a rate higher than 6% is not materially affected by your military service.
• Postponement of foreclosures: No sale, foreclosure or seizure of property for nonpayment of a pre-service mortgage debt is valid if made during or within nine months after your service on active duty, unless carrying out a valid court order. This can provide tremendous protections from foreclosure. Be sure to contact your legal services office for help with missed mortgage payments.
• Deferred income taxes: The IRS and state and local taxing authorities must defer your income taxes due before or during your military service if your ability to pay the income tax is materially affected by military service. No interest or penalty can be added because of this type of deferral.
• Protection for small-business owners: If you own a small business, your nonbusiness assets and military pay are protected from creditors while you are on active duty. This applies to business debts or obligations.

Learn more about the important sections of the Servicemembers Civil Relief Act.

Preparing financially before deployment is no small task. There are a variety of resources to help you and your loved ones with everything from organizing and planning your finances to emergency financial assistance, including:

• Road to Financial Readiness infographic – offers an easy-to-follow plan.
• Emergency financial assistance from the American Red Cross, including financial and disaster assistance, emergency communication support and community education. Learn more about American Red Cross support for military families.
• Financial information during emergencies from the United Service Organizations – a private, nonprofit organization supporting service members and their families by providing morale, welfare and recreation-type services.
• Emergency financial help through your branch of service. Before your deployment, you may want to preauthorize your loved ones to get financial help in case there’s an emergency while you’re away.