For some service members, a deployment can complicate the household budget. You might have unusual expenses or receive special pays and entitlements before, during, or after a deployment. But staying "fiscally fit" while you're deployed just takes a little extra effort on your part. By paying attention to changes in your expenses and income and following these tips to keep spending in check and grow your savings, you can make sure a deployment doesn't throw your finances off track.
Your deployment entitlements
By knowing and understanding your deployment pays and entitlements, you'll know exactly what you have to work with when you plan a budget. Be sure to check with your unit's administrative section to confirm what you'll be receiving. If you're deployed for more than thirty days, you're eligible for certain entitlements. If it's a combat deployment, short or long, depending on your unit, you will receive other compensation for your hardships. These can include
- Family Separation Allowance (FSA). Service members, with dependents, assigned away from their permanent duty station may receive this allowance every month. It ends when you come home.
- Combat Zone Tax Exclusions. If you're receiving hostile fire pay because of assignment to a combat zone, the pay will be tax exempt.
- Hostile Fire/Imminent Danger Pays. If you're eligible, you may receive this pay.
- Per Diem. This is money paid out for each day you're deployed for a deployment lasting more than thirty days.
- Hardship Duty Pay. This is a monthly payment for specific missions at full monthly rate whenever any part of the month is served fulfilling a specific mission.
In some units, deployments can happen literally overnight and your entitlements can fluctuate quickly. Be careful not to overspend. The following tips can help you stay on track financially:
- Check your Leave and Earning Statements regularly. Go to the MyPay website to make sure that you're receiving what you should be receiving.
- You may be entitled to other special duty pays. Your special duty pays should continue during the deployment. Be sure to check on this each month.
- Be careful if you're accidentally overpaid. In some units, pay may change dramatically and quickly, so it’s possible that you may be overpaid at some time. If this happens, report it to your administrative section. Don't spend the extra money until you have confirmed that it's truly yours. If there is an overpayment, the error will be noticed eventually and you'll have to repay the extra amount.
- Stick to your usual financial plan. Don't think of extra pays as extra money. Save as much as possible and set up payments to pay down credit cards and debt.
Before you deploy
Juggling bills during deployment can be nerve-racking. New expenses that can pop up before and during a deployment can make your finances seem unpredictable. These ideas can help you put things in order before you go:
- Before deployments set up an automatic payment to savings. Money you don't see is money you won't spend.
- Make sure you always know how to handle the bills. With rapid deployments, it's especially important for you to make sure a trusted family member has a full understanding of all your household bills and access to the necessary accounts.
- Sit down with your spouse or family member before you leave. Keep a list of all of your combined bills and note when they're due. Also, make sure you have the necessary powers of attorney in place if your spouse has to make a purchase on your behalf. (Your Legal Assistance Office can help with this.) Make sure you agree on your budget and that you're honest about your expenses.
- Don't overspend before the deployment. Make a budget for deployment spending. Be sure not to go overboard with electronics and equipment that you don't need. Also, set up a separate account for deployment spending so that if someone overspends or miscalculates, the damage is less likely to jeopardize both your family's needs AND your own.
- Keep an ongoing checklist of your bills. Have your family member keep a running list of dates when payments clear.
- Always keep some extra money in savings. Make sure you keep some extra savings for emergencies, even if it's just a few dollars from each paycheck. The Military Saves program can help you set savings goals, put them in writing, and stick to them.
- Don't overspend while you're deployed. In some deployment areas, you'll have the opportunity to buy electronics, books, food, and specialty items just like you do at home. Keep your bills at home in mind, and be careful not to overspend.
- Keep communication open with your spouse. Be honest about what you're spending.
Take advantage of extra savings during deployment
The Department of Defense (DoD) offers unique savings plans during deployment. If you take advantage of these higher-rate savings you can build a nice nest egg. Here are a few options:
- Savings Deposit Program. The Savings Deposit Program has a very high interest rate of ten percent and is an excellent option for service members deployed in a combat zone. This program is only available during deployment.
- Thrift Savings Plan. If you don't invest regularly in the Thrift Savings Plan (TSP), definitely do so during deployment. You're not likely to miss the money coming out every month and you'll enjoy the benefits later on.
- Roth TSP Investments. Traditionally, participants invest pre-tax dollars into their TSP accounts. With the Roth TSP, participants have the option to make Roth contributions, which allow participants to invest after-tax dollars into their TSP accounts too. When you withdraw funds from your traditional TSP, you will have to pay taxes on the money, as well as the earnings it has accrued. With Roth contributions, you have already paid taxes on the money, so you can withdraw it tax-free, along with any earnings it has accrued, as long as meet you meet certain requirements. Check out our article on Roth TSP Investments for more information.
- Your Military Star Card offers special lower interest rates during deployment. Make sure you or your spouse contacts your Exchange Credit Services before the deployment.
Homecoming and overspending
Homecoming is an exciting time, and it can be tempting to overspend when you celebrate. So be careful or else you could end up paying the price for a long time. Here are some ways to keep your homecoming debt free:
- During the deployment, take some of your savings and set it aside for a special occasion. Even $50 a month adds up.
- Go to your installation travel office for special post-deployment deals. Also, if you're going to a family resort, be sure to ask whether special rates are available for service members returning from deployment and their families.
- Shop at your installation exchange and commissary for post-deployment celebrations. The tax break and special sales can save you a bundle.
- Put some of your money where you can't get to it. If you have some extra money each month, ask your financial institution about investing a small amount every month. This way you won't be tempted to spend it and you'll have some extra cash later on.