Manage Finances during Military Deployment

The good news is that in the military payday always comes around. The bad news is that sometimes, for many,  there is more month left at the end of the paycheck. The stress of deployment along the stretch of family finances can sometimes lead to real trouble while soldier or sailor is far from home. 

What to do first

Military pay and allowances are as structured as everything else in the service. The term “pay grade” is equivalent to “rank,” and people are paid accordingly. The main financial “unknowns” are the unexpected expenses (car repairs, etc.). The amount coming in, however, is static and predictable (unless, happily, an increase in rank or a reenlistment bonus is on the horizon). 

*Make budget that:

. lists known and predictable expenses. Base it on past bills and spending, but subtract anything that is connected solely to both parents’ being home. (For example, the grocery bill might be somewhat less with one adult absent.) Budget those expenses, and where possible make them payable through automatic fund transfers. 

.  takes into account possible unforeseen expenses. How old is the family car? Is the water heater ready to break? How’s the heating and air conditioning? 

. factors in other pay increases incident to tax breaks for combat zone tax exclusion, hostile fire pay, etc.  Factor in any additional pay or allowances that might accrue for overseas (family separation) or combat service.

 . subtracts the known expenses from the known income. What is left over is discretionary or for emergency use. 

 . sets aside money for the deploying spouse’s use in looking after health and comfort issues, long distance phone calls, souvenirs, etc.,  while deployed.  

 . sets some money aside for a family vacation after the deployment is over.

 *Consider doing some preventive maintenance on the family car and your major appliances.

 *If the deployment occurs over the April 15 tax-due date, gather up all the records. Consider executing a full Power of Attorney or IRS Form 2848 signed by both husband and wife. You also may want to consider filing the IRS Form 2350 applying for an extension of time. Check the IRS web site for further information.

 *Make sure your insurance and SGLI designations are up to date. If anything happens to you, the military will pay the insurance benefits to the beneficiary you designate.