By Laura Royer
The stressful challenges of financial management and balanced budgeting faced by military families can be exacerbated by deployment if they are not handled properly. Personal Finance Managers (PFMs) can assist military families in preparing financially for deployment. This preparation not only covers tasks that need to be completed before deployment, but also allows the Service member to set a plan for managing money while deployed, and during reintegration.
Preparing Finances for Deployment
First and foremost, all finance-related paperwork should be gathered and put in order. Have clients review legal documents to ensure dependents are listed properly. If necessary, accounts which need a power of attorney to be assigned for the deployment period should be taken care of now.
Make sure your client makes arrangements for family health care, including health and dental insurance plans. He or she will want to check for the accuracy of dependents listed to deter any financial emergencies or denial of coverage.
Another recommendation is to have the Service members you work with place any bills or expenses on automatic payment plans to help reduce financial stress while deployed. Be sure to review his or her cash flow to be sure money is available to cover all expenses and avoid nonsufficient funds (NSF) fees.
Since deployment often increases income by combat zone pay, Service members should research the eligibility and saving limits of a Department of Defense Savings Deposit Program. Saving the extra income will help boost the Service members’ financial position upon return from deployment and allow for money in reserves to be used for financial goals.
Communication with a spouse or family members who may be handling finances while the Service member is deployed should be a priority. Spouses should understand how to read and the importance of checking the Service member’s Leave and Earnings statement, especially reviewing for inaccuracies with income and deductions.
The entitlement section of the Leave and Earnings statement breaks down the base pay, special, and incentive pay, and allowances provided to the Service member. Deductions should include Medicare and Social Security taxes, state and federal taxes, and Thrift Savings Plan contributions. Spouses should know all the amounts for each pay section, be clear on all special allowances and deductions to verify accuracies.
This is the time to revisit budgeting and savings plans to determine if they need to be revised. Both spouses should fully understand how money is to be allocated among spending categories, and a communication plan should be in place for how to manage any unexpected expenses or budget changes during deployment.
Finally, if changes to housing needs will be required upon return, these should be determined before deployment to minimize the stress of finding housing or reoccupying a home that was rented while in deployment. Refer to the Department of Defense’s Military Housing Privatization Initiative Tenant Bill of Rights for more.
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