Horror stories of soldiers accruing debt while serving are far too numerous. Financial preparation can reduce stress 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?
Things to do Before Deployment
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:
Create an Emergency Fund
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.
Research What Creditors Offer Military Members on Duty
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 deployed. This law still requires the military member to give the bank or property owner and other creditors proper notice of deployment.
Small Decisions Can Lead to Big Savings
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. A stored car also runs no risk of repair or damage if it is not being used. Another way to save money is to 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.
Obtain Legal Protection of Finances
Assigning a trusted Power of Attorney to manage accounts and budgets could help to limit big spending and protect service members from theft or loss while deployed. 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 courtesy US Army Korea