Before Deployment:
Prepare To Prevent Crises
Before Deployment: Prepare To Prevent Crises
1. Review budget and financial goals.
2. Update insurance.
3. Institute Power of Attorney and estate planning documents.
4. Sign up for military discounts and special interest rates.
Darla Crawford wishes she and her husband Tim had been better prepared financially for deployment. Married only 26 days before Tim shipped out for Iraq, the couple still had separate accounts, from credit cards to cell phone providers. Darla was left to sort out the mess and scramble to avoid late payments.
"My financial responsibility doubled when Tim deployed," Crawford said.
Crawford's situation shows the need to plan ahead, since deployment can happen at any time. Take time now to sit down with your partner to create a deployment action plan for your finances, instead of managing a crisis later. These tips can help get you started:
Figure out finances. Do you know which bills get paid each month, when they're due and how much money is in your savings account? If not, it's time to take a crash course in "family finance 101."
Understanding your family's financial situation, including monthly bills, how much debt you owe and how much you have for emergencies will protect your credit score and your sanity. Even one late payment can affect your credit report negatively. To make sure all bills get paid on time, take advantage of online banking services or automatic payment plans.
Revisit insurance policies. It can pay to dust off your life, auto and homeowners or renters insurance policies to find out if they are up-to-date or need to be changed due to deployment.
Crawford found that their policies needed an overhaul. "We canceled my husband's renters insurance policy for his on-base apartment, since he would no longer live there. And I added him to my employer's life insurance plan, since SGLI coverage wasn't enough to cover our needs."
If you decide you need additional life insurance, make sure the plan covers a combat-related death. Many policies won't.
Put it in writing. A marriage license doesn't always guarantee legal access to your deployed spouse's financial accounts, assets or belongings. Make sure you're listed as a joint account holder on all accounts, such as credit card or checking accounts, so you're authorized to make changes and get information.
Then, go a step further by contacting your local JAG office to create or update a durable power of attorney, which allows you to manage legal matters for both of you, such as refinancing your home. At the same time, create or update your wills and healthcare directives to make sure your wishes are carried out.
Track down discounts. Money can be tight during a deployment, so take advantage of the Servicemembers Civil Relief Act, which gives active duty military members - including mobilized Guardsmen and Reservists - exclusive benefits such as reduced interest rates on credit cards, mortgages and auto loans (if the debts are incurred prior to entering active duty).
Since some military families experience financial hardship in the spouse's absence, several banks offer interest-free mortgage assistance loans to help. Some insurers also offer reduced auto insurance rates for cars that will be stored.
"We were able to cut our auto insurance payments quite a bit since my husband wouldn't be driving during his time away," said Kruse.
Strive for saving. When money is tight, it's tough to save. But time is the biggest asset you have when it comes to growing your savings. If your credit card debt is under control, begin saving for an emergency fund - three to six months of living expenses - in a savings or money market account.
Then, start contributing to a retirement savings plan, such as a Roth IRA or the government's Thrift Savings Plan (TSP). Set up automatic withdrawals from each paycheck to make saving easier.
In addition, the military's Savings Deposit Program, helpful for short-term savings goals such as a down payment on a home, allows servicemembers in a combat zone to contribute up to $10,000 and earn a guaranteed 10 percent annual interest rate. The money must be withdrawn within 90 days of return.
1. Review budget and financial goals.
2. Update insurance.
3. Institute Power of Attorney and estate planning documents.
4. Sign up for military discounts and special interest rates.
Darla Crawford wishes she and her husband Tim had been better prepared financially for deployment. Married only 26 days before Tim shipped out for Iraq, the couple still had separate accounts, from credit cards to cell phone providers. Darla was left to sort out the mess and scramble to avoid late payments.
"My financial responsibility doubled when Tim deployed," Crawford said.
Crawford's situation shows the need to plan ahead, since deployment can happen at any time. Take time now to sit down with your partner to create a deployment action plan for your finances, instead of managing a crisis later. These tips can help get you started:
Figure out finances. Do you know which bills get paid each month, when they're due and how much money is in your savings account? If not, it's time to take a crash course in "family finance 101."
Understanding your family's financial situation, including monthly bills, how much debt you owe and how much you have for emergencies will protect your credit score and your sanity. Even one late payment can affect your credit report negatively. To make sure all bills get paid on time, take advantage of online banking services or automatic payment plans.
Revisit insurance policies. It can pay to dust off your life, auto and homeowners or renters insurance policies to find out if they are up-to-date or need to be changed due to deployment.
Crawford found that their policies needed an overhaul. "We canceled my husband's renters insurance policy for his on-base apartment, since he would no longer live there. And I added him to my employer's life insurance plan, since SGLI coverage wasn't enough to cover our needs."
If you decide you need additional life insurance, make sure the plan covers a combat-related death. Many policies won't.
Put it in writing. A marriage license doesn't always guarantee legal access to your deployed spouse's financial accounts, assets or belongings. Make sure you're listed as a joint account holder on all accounts, such as credit card or checking accounts, so you're authorized to make changes and get information.
Then, go a step further by contacting your local JAG office to create or update a durable power of attorney, which allows you to manage legal matters for both of you, such as refinancing your home. At the same time, create or update your wills and healthcare directives to make sure your wishes are carried out.
Track down discounts. Money can be tight during a deployment, so take advantage of the Servicemembers Civil Relief Act, which gives active duty military members - including mobilized Guardsmen and Reservists - exclusive benefits such as reduced interest rates on credit cards, mortgages and auto loans (if the debts are incurred prior to entering active duty).
Since some military families experience financial hardship in the spouse's absence, several banks offer interest-free mortgage assistance loans to help. Some insurers also offer reduced auto insurance rates for cars that will be stored.
"We were able to cut our auto insurance payments quite a bit since my husband wouldn't be driving during his time away," said Kruse.
Strive for saving. When money is tight, it's tough to save. But time is the biggest asset you have when it comes to growing your savings. If your credit card debt is under control, begin saving for an emergency fund - three to six months of living expenses - in a savings or money market account.
Then, start contributing to a retirement savings plan, such as a Roth IRA or the government's Thrift Savings Plan (TSP). Set up automatic withdrawals from each paycheck to make saving easier.
In addition, the military's Savings Deposit Program, helpful for short-term savings goals such as a down payment on a home, allows servicemembers in a combat zone to contribute up to $10,000 and earn a guaranteed 10 percent annual interest rate. The money must be withdrawn within 90 days of return.