Returning from a deployment is a wonderful time to get back into routines and catch up with family and friends.
Chances are, you have probably noticed a few changes in your life, and one is likely your finances. It is common that your spouse’s military pay has decreased, and your family’s expenses have increased.
Melissa wants to share her tips for a positive post-deployment homecoming.
Read on for some great suggestions to manage the adjustments in your financial situation following a deployment.
Spending Plan Update
Did you set any financial goals prior to deployment? If so, go back and revisit those goals and evaluate your progress. If not, now is a great time to set new financial goals for the future. Set goals that are S-M-A-R-T: Specific, Measurable, Attainable, Relevant, and Time-bound. Keep these goals in mind moving forward.
Make changes to your family budget to address changes in income and expenses. Look over your spouse’s Leave and Earning Statement (LES) together to see what deployment-related pay will go away. This can include hazardous duty, hostile fire, and family separation pay. Also, if your spouse deployed to a combat zone, they may have been receiving tax-free income benefits that will end. Plan and adjust your budgets for the decrease. Also consider possible increases in expenses. Increased housing, transportation, or entertainment costs should be factored into your family’s new post-deployment budget.
If you need a little extra help getting started on your budget updates, watch the videos at the bottom of the Create a Budget section of the Money Ready guide to give you a four-step process. Click here.
It is so great to be back together that you may want to take a last-minute vacation or make a large spontaneous purchase. These “feel-good” purchases can negatively impact your budget and long-term goals. So, take a brief pause and decide if this is the right thing for your family at this point. As an alternative, set the purchase as a goal and plan for it. Or treat yourself to something smaller that won't break the bank. Consider how a big purchase with an ongoing financial commitment (like a new car with a five-year loan) will impact your post-deployment budget. Evaluate your long-term goals like saving for retirement or your children’s college education and make sure they are still on track.
There are several programs that provide financial benefits during deployment, but they end once your spouse is home.
- Servicemembers Civil Relief Act (SCRA)
If used, this law decreases the interest rate on your debts to 6% during deployment. You are required to contact your creditors and inform them your deployment has ended.
- Student Loan Interest Relief
This program can reduce your student loan interest to zero while deployed, but you must contact your lenders when you get back.
- Savings Deposit Program (SDP)
This account will continue to earn the 10% annual interest rate for 90 days after deployment and will then be deposited into your account 120 days after leaving the combat zone. Discuss how to use these resources before the money is distributed.
Financial Planning Considerations
You may have had a few extra expenses during the deployment. Maybe you had car trouble, or an appliance needed repairs. This is a good time to check your savings account and develop a plan to replenish these funds. Making this a priority will save you headaches and save your pocketbook in the long run. Experts suggest having three to six months of living expenses set aside. How does your account look?
Did you increase Thrift Savings Plan (TSP) contributions during the deployment? If so and that no longer fits into your cash flow, be sure to visit myPay and make the adjustment. Keep in mind, if you fall under the BRS, keeping the TSP contribution at a minimum of 5% will allow your spouse to receive the full 5% matching contribution. That’s free money! Be sure to factor that in when reviewing your TSP.
It is always a good idea to have your legal documents in good order. The period after a deployment is a great time to revisit your estate plan and make sure it is still in line with the needs of your family and your current wishes.
- Power of Attorney — Did you set up a power of attorney before deployment? Consider if it should be cancelled, revoked or updated.
- Will — Review your will and make sure it is in accordance with your current needs and wishes.
- Named Beneficiaries — Many assets are passed on to others by named beneficiaries. It is a good idea to review beneficiaries for accounts like your spouse’s TSP, Servicemembers' Group Life Insurance (SGLI), and any other personal banking or investment accounts.
- Health — Active duty service members will not see a change in health coverage. Visit the section below pertaining to special circumstances that impact Guard and Reserve service members.
- Life — Go over your life insurance coverage and ensure the levels are appropriate for your current needs. Visit Money Ready 201: Insure Your Family for more information on the types of insurance and how much you should have.
- Auto and Property — Contact your auto insurance carrier to resume coverage when your spouse returns home if your family designated a vehicle as “not in use” during deployment. Make sure to account for any increased premium cost in your family budget. Also, review your homeowners or renters insurance coverage as well.
Preventing identity theft is something we should always take into consideration. Your spouse may have set up an active duty alert or credit freeze during deployment. This prevents someone from fraudulently getting credit in their name, but now that they’re home it can be disabled.
- Active duty alert — Each credit agency must be contacted separately. Transunion can be notified by phone. Experian and Equifax require written notice to remove the security alert.
- Security or credit freeze — Contact each agency separately by phone to remove the freeze.
Your spouse might have been receiving tax-free income if in a qualifying combat zone. This changes upon redeployment and taxes come out of their income so there will be an impact to the household budget.
Every situation is different and where you claim residency varies so be sure to consult with a tax advisor for help.
Also ensure you file your taxes in a timely manner to avoid penalties and interest. Just because your spouse was deployed doesn’t mean you get a pass on filing. For additional help, visit Military OneSource MilTax Tax Services at https://www.militaryonesource.mil/financial-legal/tax-resource-center/tax-services-benefits
Download this quick checklist to use as you reunite your family and finances.
Please visit the links in each section to get more information. Post-deployment is an exciting time, but it does present some financial challenges. With knowledge and planning, you can achieve your financial goals and succeed!
Remember, every family’s situation is different. Your needs, goals, and wishes are unique. What works for one family may not be right for you. Evaluate where you are and where you want to go. These tips and resources can help you get there. You’re not alone, if you’d like to meet with a Personal Financial Manager on your installation, click here to locate yours https://installations.militaryonesource.mil/
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