Preparing for a deployment involves a lot of tasks – training, attending medical appointments, packing your gear, writing your will, and preparing your loved ones. One topic that may get overlooked or left unaddressed is money. However, leaving the country for a period of time means that you need to make decisions about your finances, and it’s best not to leave them until the last minute.
Make a budget.
While you are deployed, there is the possibility that you may earn extra income beyond your usual salary. Depending on your location and family status, you could be eligible for a family separation allowance, hostile fire pay, or hardship duty pay. This additional compensation could amount to an extra $50 to $500 a month – and it provides a unique opportunity.
Instead of incorporating additional income into your budget, consider living off your pre-deployment income and either putting everything extra into savings (through the Savings Deposit Program) or investments (by increasing your Thrift Savings Plan contributions), or using it to pay down debt. This can help set you up for the future without dramatically altering your lifestyle.
Note: If your deployment takes place in a qualified tax-free location as designated by the IRS, you may not have to pay federal income tax while abroad. Leave earned during this time is also tax-exempt. Finally, while deployed, you are eligible to put more than the standard amount ($22,500) into your TSP – in 2023, you could add up to $66,000 to your retirement account (though only the standard amount can be designated as Roth). Roth funds deposited to your TSP while deployed are not subject to federal income tax.
Putting extra income aside may seem easier if you live alone and don’t have a family to support, but it’s still possible to protect your future financial interests even if you’re providing income to your family at home. Deployments seldom bring with them the opportunity to spend extra money, and your family is normally used to living off the income you make while stationed at home.
However, be realistic about what expenses might increase while you’re deployed. Do you need to pay for extra care for a pet? Will your spouse need to hire a babysitter more frequently when you are deployed than when you are home? Consider the potential for increased expenses when budgeting for your deployment, not just the increase in your income.
Make sure to cancel or pause subscription services that you won’t use while you are deployed, including television or streaming services, meal plan and food delivery services, gaming services, or personal shopping services. Over a six-month deployment, this could save you hundreds.
Set up autopay.
Even if you think you will have reliable internet access for the duration of your deployment, if you have recurring payments that need to be made while you are out of the country (like your mortgage, a vehicle loan, or cell phone bill), contact the company that manages your loan or service and set up autopay. Missing a payment because of an unexpected internet outage or because you were in the field for a period of time and missed your window to set up a payment manually can be costly, and late fees and accrued interest can have long-lasting financial ramifications.
Consider making a trusted family member or friend your power of attorney.
After you’ve set up autopay and are confident that your finances are automated, it’s still not a bad idea to give a trusted friend, partner, or family member access to your accounts. Consider them your financial back-up in case the internet fails, a bill that needs to be paid comes in the mail, or you need someone to perform a particular financial transaction on your behalf, like depositing a check.
If your designated person is not an authorized user with access to your accounts already (e.g., your spouse and a joint owner of your bank accounts), you can use a special power of attorney to give them express legal permission to manage your finances. A legal expert can help you draft your power of attorney; you may have access to legal personnel during a pre-deployment brief, or you can visit your installation’s legal office.
If any of your accounts have joint owners, make sure that each of them knows the login information and has access to the accounts in question.
Add an active duty alert to your credit report.
In an effort to prevent fraud and identity theft, you can add an “active duty alert” or credit freeze to your credit report. This means that businesses must verify your identity before opening a new line of credit or raising your credit limit, making it more difficult for someone to open a line of credit in your name. Active duty alerts last for one year by default, but you can request to have the alert removed sooner if your deployment isn’t set to last for 12 months; you can also renew the alert if you will be deployed for more than a year. This is an important protection, as you may not be able to receive fraud alerts via text message or email while deployed.
Adding an active duty alert is simple – contact one of the three credit bureaus (Equifax, Experian, or TransUnion) and ask to add the alert by phone or submit an online form.
Call your car insurance company.
If you have a vehicle that won’t be driven for the duration of your deployment, call your car insurance company and ask if they can drop your rates while you’re away. You can request that your vehicle be “put in storage.” This does not mean that you need to pay to actually store your vehicle at a storage facility; it just means that the vehicle won’t be driven by yourself or anyone else. For the duration of your deployment, your vehicle can be stored in a friend’s or family member’s garage. Less risk of an accident means lower premiums.
Note that while it can be tempting to save on premiums, it may not be wise to completely cancel your car insurance policy. If your car is financed, your lender likely requires coverage. Plus, if you cancel the policy, you may not be able to get it reinstated at the same rate.
Decide what to do with your belongings.
What to do with your home and belongings depends on your current living situation.
- If you live in the barracks, you will be required to pack up any belongings that won’t accompany you on deployment and leave them in storage.
- If you live alone in a rented apartment or a house, consider ending your lease, packing everything up, and renting out a storage unit for the duration of your deployment. This can save you a considerable sum of money since you will no longer have to pay for housing. Note that you should still consider maintaining a property insurance policy on your belongings while they are stored.
- If you live with family, you may not need to do anything with your belongings. If your family will stay in the same apartment or house while you are gone, nothing needs to change. If your family will move during your deployment, items should be packed up and either moved to your family’s new residence or stored until your return.
Update your beneficiaries.
As a servicemember, you have access to at least one life insurance policy: SGLI. Take a moment before you leave to confirm that your SGLI beneficiaries are listed correctly. You can submit changes online through the SGLI Online Enrollment System via milConnect. If you elected less than full coverage for your SGLI, your policy will automatically increase to the maximum amount of coverage available if you are deployed to a qualified location – and you won’t pay premiums for coverage while you’re gone.
If you have life insurance policies outside of the military, you will also want to make sure that those policies have no combat exclusions and confirm or update your beneficiary designations with the company that issued each policy. If you want to boost your life insurance coverage to provide additional financial security to your loved ones should the worst come to pass, contact a life insurance company for a quote well before you are set to deploy to allow time for a medical exam. It usually takes between four and six weeks to complete the application process.
Take advantage of support programs.
Before you deploy, visit your local Family Support Center and consider enrolling your family in some of the support programs that are offered. These can include free childcare, meals, and special activities that provide both emotional and financial support while you are gone.
Know your rights.
The Servicemembers Civil Relief Act (SCRA) is a law that provides financial and legal protections for servicemembers. When it comes to receiving deployment orders, the SCRA allows servicemembers to terminate residential leases, vehicle leases, and phone service (when the deployment is to a location not supported by the contract). To terminate a residential lease, you typically need to provide written notice to your landlord or property management company as well as a copy of your military orders. This can save money if you don’t want to maintain your rental agreement for the duration of a deployment.