Horror stories of soldiers accruing debt while serving are far too numerous. Financial preparation could lessen the nerves of the moment and save money for both the service member and his or her family. However, how does one save while deployed? And, what are some tips for soldiers without an emergency fund?
Military members have the opportunity to save a good amount of money while deployed. This can be done through patience, self-control, and following a few simple tips like:
It is extremely difficult to put money aside. However, everyone should try their best to throw a few extra dollars every week into the bank and forget about it. This is the most effective way to meet emergencies and life-changes head on. Try paying yourself first, aim to deposit 8-10 percent of your paycheck and try to forget about it until an emergency arises.
Some creditors have military discounts and forbearance. Call them to find out what a military member can do in the case of deployment. Many of them will have an answer. However, some will not want to offer any lenience. In that case, all service members leaving for active duty should utilize the protections provided under the Servicemembers’ Civil Relief Act. The law protects military members from financial burden. They can eliminate or lower income tax, credit card debts, mortgage payments and rent while on duty. For members with families, the law gives them peace of mind because banks are not allowed to evict or foreclose on a home while a service member is on duty. This law still requires the military member to give the bank or property owner and other creditors proper notice of deployment.
For example, store the car away and do not let anyone use it. Insurance companies will lower plan rates for a car not in use. Not to mention, a stored car runs no risk of repair or damage if it is not being used. Another way a small decision could save money—suspend cell phone coverage. Many mobile providers can suspend your coverage and let you keep your same number for up to 18 months and reactivate the phone upon your return. This makes perfect sense for soldiers who regularly use online phone services such as Skype as well as prepaid phone cards and email to communicate with their family and friends back home.
Assigning a trusted Power of Attorney to manage accounts and budgets could help to limit big spending and protect from theft or loss while gone. It would be a nightmare to come back only to find an empty bank account.
It is important to make sure family and friends are on the same page about the actions taken to protect funds. Assure them of insurance coverage as well as the protections under SCRA. Be strict about spending and the use of personal property while away. Taking the above precautions will leave one with money in the bank as opposed to substantial debt.
Photo thanks to US Army Korea under a creative commons license from Flickr