Prepare for Military Life's Surprises...With Your Tax Return

By Alecia D. Blair, Military Saves Communications Associate

By now, you may know how you want to spend your tax return. Before you’ve spent the money in your mind, think about this. Military life poses many challenges that are very different from civilian life. These challenges can often be eased by having some money saved. With deployments and permanent change of station (PCS) moves, here are some wiser ways to spend your tax return in the New Year.

A “rainy day” fund isn’t just nice to have; it’s a must-have.

Reimbursement rates for temporary duty (TD) assignments have recently been cut, putting more responsibility on military families to plan ahead and budget. A solid “rainy day” or emergency savings fund is essential when you need cash up front. PCS orders can come at any time. Many expenses associated with these moves are not reimbursed until after the move, so having a strong emergency savings can help you be ready for the expensive unexpected.

Save automatically to your Thrift Savings Plan (TSP).
As a servicemember, you have the option of signing up for the government-sponsored Thrift Savings Plan. This retirement plan comes with some great tax benefits. The best part is that it’s yours to keep should you separate from service early or stay in until retirement. If you haven’t started your TSP or could add more to it this year, consider using your tax return for this purpose.

Evaluate your insurance.
Have you recently PCS’d? Moving to a new state and duty station might mean that you need to increase your auto insurance coverage. Has your family grown this year? It might be time to increase your life insurance and supplement your Servicemembers Group Life Insurance (SGLI) plan. Are you living off post? Do you have adequate renters or home owners insurance? Whatever life changes have occurred in 2014, the New Year is a wonderful time to evaluate your insurance needs, protect yourself and use your tax return to make some needed adjustments.

Plan Ahead for the 2015 holidays.
If you busted this year’s holiday budget or didn’t have one to begin with, consider using some of your tax refund to establish a savings fund for next year’s holiday season. Doing so will help you have the money up front for gifts, decorations, food, travel expenses and military balls or parties, rather than using debt-creating credit cards.

Spend a little on yourself.
Since you've thought strategically about using your tax return and your other obligations have been met, it’s okay to spend a little money on yourself. As a military servicemember or family, you’ve earned it. Take some time to talk about the purchase you’d like to make or the place you’d like to go. Discounts and deals are plentiful after the holiday season, so shop smart!

Whatever your strategy, make sure you plan to use your tax return wisely, keeping in mind the many surprises the military can throw your way. Be resilient. Set a goal. Make a plan. Save automatically.

Tip of the Day

  • Written by Guest Blogger | April 30, 2014

    Check out these 54 Ways to #save on groceries, transportation and more >>

Saver Stories View all »

A Disciplined Approach to Saving

Written by Super User | November 26, 2010

I just recently retired after 30 years of service with the Marine Corps. I truly enjoyed my time serving the Corps and I flourished in the disciplined environment. I also took a disciplined approach to saving. Here are some of the tactics I used-they are very low to moderate risk.


One Sailor's Course to Financial Freedom

Written by Super User | November 26, 2010

We all know its not easy to get out of debt once you in over your head. But it can be done with the sound advice and support that the Military Saves program offers. I am a testament to that. I was a recently divorced, single mother. Like many people I had credit card debt, a car loan, bad credit, and a low income job that never seemed to be enough to put food on the table.

Then I decided I'd had enough of living paycheck to paycheck and worrying about money all the time.


60 Teens participate in Massachusetts Youth Saves Program

Written by Super User | November 26, 2010

During the months of June & July, 60 teenagers aged 13-19 from Marine, Coast Guard, Army, and Air Force families attended Youth Saves programs across the Commonwealth of Massachusetts to help increase their knowledge of financial literacy.