Four Steps to Put Your Financial House in Order

Airmen prepare for deployment.

With deployment, comes more money. During your deployment, you may be eligible for military pay entitlements, such as a family separation allowance or combat pay.

This is an ideal time to save money, pay off debt or just tidy up your finances. Here are four steps to get the most out of your money and help reach your family’s financial goals:

First step: save

Set and execute savings goals. Don’t let that extra cash burn a hole in your pocket. Put it toward something that will make a difference. Pay off your car. Save for retirement. Sock it away for the kids’ college savings. Or save for a post-deployment vacation. Your savings roadmap:

  • Enroll in the military’s Savings Deposit Program. Those serving in combat zones can build up savings quickly. You get 10 percent annual interest on deposits!
  • Make saving automatic. Set up an allotment or automatic transfer into a savings account from your pay via myPay. It’s an easy way to save and track your Leave and Earning Statements.
  • Take the Military Saves pledge. Join the tens of thousands of service members who use Military Saves’ advice and tools to create savings goals and a plan.
  • Contribute to your Thrift Savings Plan. Make sure you put something toward retirement. You’ll thank yourself down the road.

Second step: deal with housing

Consider your home. If you own a house, it’s probably your biggest asset. If your family moves closer to loved ones — or if you live in the home alone — do the math to see what makes sense: selling or renting out your home. Otherwise, consider having a family member or friend stay there if you want to avoid selling or renting.

Before renting out your home, take these steps:

  • Visit your installation’s legal assistance office to understand your rights and responsibilities as owner before writing a leasing agreement.
  • Check with your homeowners’ association to see about any restrictions on renting.
  • Contact your insurance company about coverage on renting out your home.
  • Consider hiring a property manager who can find renters, collect rent and do maintenance.

Renting? You can break a lease early if you get a permanent change of station or deployment orders for more than 90 days, thanks to the Servicemembers Civil Rights Act.

Third step: communicate, communicate, communicate

Talk with your spouse or partner about the financial aspects of deployment—and possible money issues that may arise. You want to get on the same page regarding what do to with the extra income and the assets you have. Having a plan you both buy into increases the chances you’ll reach your savings goals.

Last step: seek free, professional money advice

Remember, not just anyone can do your job. So you shouldn’t be expected to know all the ins and outs of money management. We have your back. Most military and family support centers can provide deployment support, as can your installation’s legal assistance office. Or contact Military OneSource at 800-342-9647.

Websites

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Department of the Treasury Financial Literacy and Education Commission — The Financial Literacy and Education Commission is comprised of 20 federal agencies including the Department of Defense, that provide financial education. The website, MyMoney.gov, provides information on various personal finance topics from across the spectrum of federal agencies that deal with financial issues and markets. Additionally, the Department of the Treasury’s website provides financial calculators and a toll-free number (888-MyMoney) available in Spanish and English for anyone in the general public seeking information about federal financial education materials.

USAGov, formerly known as the Federal Citizen Information Center, publishes the Consumer Information Catalog, the Consumer Action Handbook, operates the USAGov Contact Center, and a family of websites to provide free, timely, and useful government information to the public.

Federal Deposit Insurance Corporation — The FCIC provides answers to questions about the federal government and everyday consumer issues. The FCIC is a partner in the Department of Defense Financial Readiness Campaign and assists by tailoring its Money Resource Information to Department of Defense personnel.

Federal Reserve Board — The Federal Reserve website provides resources to educate leaders and consumers about regulations and practices that impact servicemembers and their families, like the Servicemembers Civil Relief Act.

Federal Trade Commission Bureau of Consumer Protection — The Bureau of Consumer Protection strives to protect consumers against unfair, deceptive or fraudulent practices through investigations and legal action. The Enforcement Division litigates civil contempt and penalty actions to enforce FTC court injunctions and administrative orders addressing consumer protection issues, data security, fraud and other scams.

Internal Revenue Service Tax Information for Members of the Military — The IRS website serves as the main source of information for determining and paying federal taxes. The Tax Information for Members of the Military portion of the IRS website provides further tax information specifically targeted to service members and their families.

MilitaryINSTALLATIONS — MilitaryINSTALLATIONS is a searchable directory of worldwide installation and state-related military information, programs and services. It provides easy access to fast facts, articles, website resource directories, photos, contact information, major units, weather and maps. With this resource, users can quickly find relevant information about any installation or military resources in their state. Learning about a new community was never easier.

Military Consumer Sentinel — Military Sentinel is a joint initiative of the FTC and the Department of Defense designed to help improve consumer protection for service members, their families and Department of Defense civilians. The Military Sentinel website allows service members, DoD civilians and their families to file consumer complaints that are used by over 500 law enforcement organizations to target cases for prosecution and other enforcement measures.

Military OneSource — Several financial services are available for service members and their families through Military OneSource, including financial counseling, financial planning, tax consultations and a filing program. In the Financial Services briefing you’ll discover exactly how Military OneSource can guide service members and families through all things financial, including investments and debt. Links to all other service provider briefings can be found by visiting our Service Provider page.

US Securities and Exchange Commission — The SEC Office of Investor Education provides services and answers to questions consumers may have concerning investing and how to avoid fraud. The website also has separate sections for researchers, teachers and students.

U.S. Department of Agriculture, Cooperative State Research, Education, and Extension Service — The Consumer and Family Economics group within the USDA, CSRESS was created to enhance economic opportunities and quality of life among families and communities by strengthening the capacity of families to establish and maintain economic security. The USDA CSREES is sharing relevant financial education research, knowledge, resources and tools with the Department of Defense, military personal financial counselors, educators and command financial specialists.

Military State Policy Source – The Military State Policy Source is part of the Department of Defense’s initiative to identify and address the most pressing needs of service members and military families affected by state policies. The website lists the highest-priority, key issues identified by the Defense-State Liaison Office, or DSLO, best practices implemented by states, regular updates on the state of legislation on key issues across states, and official Department of Defense data about military families.

How to Pay Down Your Holiday Debt

Photo of past due bills

If you overspent during the holidays this year, it’s time to get your finances back on track. By setting some goals and committing to them, you can pay down your debt, rebuild your savings and gain control over your finances again.

  • Determine monthly debt payment amounts. Once you’ve paid your bills and other necessities each month, figure out how much you can spare toward paying down your debt.
  • Figure out where you’re paying the most interest. If you put your holiday shopping on a credit card, you may be losing significant amounts of money each month in interest. Determine which of your credit cards carries the highest interest and pay down that card first.
  • Put “extra” money toward your debts. If you get a bonus at work or receive a tax refund, consider putting this unexpected money toward your debt to make a big dent without affecting your monthly spending plan.
  • Embrace small savings. Consider giving up your daily latte habit or clipping coupons for a few months to have a little extra cash flow to put toward your debt. Just an extra 20 dollars a week can make a difference over time.
  • Plan ahead. Once your holiday debt is paid off, consider taking the monthly money that you were using to pay down your debt and sticking it in a savings account. That way, you’ll be more prepared for holiday expenses next season.
  • Make a spending plan for next holiday season. Don’t get caught with holiday debt again next year. Follow these tips for saving money during the holiday season.

You have strong resources to help you navigate your finances. Free personal financial counseling is available through your installation’s Military and Family Support Center and Military OneSource.

Building a Solid Emergency Fund and Creating Financial Readiness

hands filling out paperwork

As a member of the military, you know to be prepared for anything. That’s why building and maintaining an emergency fund is key to financial readiness. That fund allows you to focus on the mission, knowing that you and your family can handle life’s curveballs.

How Much to Save

A good general recommendation is three to six months of living expenses, but don’t worry if your first milestone is less. Sit down with your family to develop a financial plan to put away anywhere between $500 and $1,000 to start.

  • Start with $25 per week, which will get you to $500 in about four months.
  • Set up a payroll deduction directly to your savings account.
  • Increase the amount in your emergency fund once you’ve met your initial goal.

Find ways to save

Even if you have a tight budget, you can find small amounts to save. Try the following ideas for trimming your expenses:

  • Reduce your interest rate — Contact your credit card company and ask for a reduction. Let them know that you’ll be shopping around for a new credit card company if they won’t cut your rate.
  • Compare insurance rates — Research prices on auto and homeowners insurance premiums, and look into using just one company for all your policies.
  • Lower your grocery bill — Make a weekly meal plan and grocery list for smart shopping and use store ads and coupons when you can.
  • Make small adjustments — If you’ve been dining out twice a week, going to the movies regularly or stopping by your favorite coffee shop daily, try cutting back. Go out to eat just once a week and watch the savings add up.
  • Review your bills — Take a good look at where you’re spending your money and cancel any memberships or subscriptions that you really don’t need.
  • Save your refund — Instead of spending your tax refund this year, consider putting it into your emergency fund for an immediate savings boost.
  • Sell your extras — Take inventory of your belongings and sell extras and unwanted items online or at a garage sale.
  • Collect change — Empty your pockets into a container daily. Cash it in monthly to add to your emergency fund. Apply the same concept to dollar bills for faster savings.

Using your fund

Once you’ve established an emergency fund, make a list of times when you would feel comfortable using it. Some people have difficulty recognizing that it’s time to dip into their emergency savings and instead pull out their credit cards, which leads to debt. Once you’ve used money from your fund, set a goal to replenish it through weekly savings so that you can cover the next emergency. Take comfort in knowing that you can provide for your family even in a time of crisis.

Learn more about financial readiness by visiting your installation’s Personal Financial Management Program or call Military OneSource 800-342-9647 for free financial counseling. OCONUS/International? Click here for calling options. A financial counselor can confidentially review your situation and recommend how you can take advantage of Department of Defense resources.