Your Deployment Finances
By FINRA Investor Education Foundation Staff
Deployment can surface many emotions, including excitement, anxiety and even fear. One emotion that doesn’t have to deploy with you is worry about your money. With planning, you can eliminate much of the concern about your personal finances before you go.
If you’re married, it’s best to discuss the management of your finances with your spouse well in advance of the deployment. Talking about money under normal conditions can be stressful; talking about it while one member of a couple is overseas is much more so. It’s important that you’re on the same page before you execute your orders.
Follow your unit’s deployment guide. You may be offered briefings and provided reference materials and checklists to help ensure your finances are in good order. Use all of the materials, and ask your spouse to attend briefings with you and participate fully. After all, she or he may have to pick up where you left off.
You should also review your legal documents. These will be critical to your family should you become incapacitated.
Become familiar with protections provided by the Servicemembers Civil Relief Act (SCRA). The SCRA was enacted to help service members keep their financial lives on an even keel while on active duty, particularly while deployed; turn to your unit or base legal (JAG) officer with any SCRA questions. Contact your creditors, particularly any who charge more than 6% interest on loans incurred prior to your service. These may include providers of student loans taken out after 2008. If your lender doesn’t know you’re on active duty, they won’t automatically lower your interest rate.
It’s usually a good idea to automate as many of your payments as possible. That way you will be sure that you won’t miss or be late with a payment, which can have a significant negative effect on your credit rating.
Notify your landlord or mortgage holder about your deployment. SCRA can help here, too; but if you don’t inform your landlord that you will deploy, they may think you skipped town. You don’t want to return to find your family evicted or your belongings sold to cover missed rent payments.
SCRA may also protect you if you need to cancel an existing contract before deployment. Most leases for apartments or vehicles, and even cell phone service contracts, can be terminated due to orders out of the area for more than 90 days (whether PCS or deployment). Weigh this option carefully; you may not want to pay rent for a vacant apartment or store a vehicle for the length of your deployment. Besides the perils to unattended property, you may not even return to the same area. Disposing of some of your property may have the added benefit of lightening your mental duffle bag in deployment as well. Keep in mind that SCRA doesn’t cover all contracts, though, so check with your JAG if in doubt.
Consider placing an active duty alert on your credit report. An active duty alert adds an extra layer of protection to the credit records of service members who are deployed, and requires businesses to take extra steps before granting credit in your name. Active duty alerts last for one year, can be renewed to match the period of deployment and do not cost you anything to place or remove. Placing a call to just one of the three major credit reporting bureaus is sufficient, as each is required to notify the other two bureaus.
Seek out your unit HR office or installation Personal Financial Manager (PFM) for deployment financial guidance. They can help you take best advantage of your finances by maximizing deposits into the Thrift Savings Plan (TSP) and the Savings Deposit Program (SDP). The SDP guarantees interest well above market rates for pay earned in a combat zone and provides the means for service members to build wealth while deployed. The TSP provides tax advantages for pay deposited in a retirement account while in a combat zone. Look into both; they can be great ways to sock away money while deployed.
And finally, thanks for what you do for all of us. Be careful out there. We want you to come safely home.
Need some pointers on how to get started? SaveAndInvest.org can help.
- Written by Guest Blogger
- Category: Blog
- Published: 12 April 2016