Deployment is a reality of military service that comes with unique financial challenges. The process can bring unforeseen expenses, and deploying to a new, unfamiliar environment can create both anxiety and uncertainty. Spouses, on the other hand, may suddenly find themselves forced to do the work of two people while dealing with their own separation worries.
Given the emotional stress of deployment, its financial implications can almost be an afterthought. However, it is essential to have a keen grasp of the many ways that deployment can impact your finances. Let's take a closer look at the financial challenges (and opportunities) created by deployment.
Emotional Stress and Financial Management
The stress caused by the deployment of a spouse can manifest in many ways – and falling behind financially is one of the most common. When you're suddenly forced to assume all household and even parenting responsibilities, budgeting and bill paying don't always rank first on your list of priorities.
Understanding the emotions you're dealing with is the best way to ensure you don't allow your finances to spiral out of control during a spousal deployment. To help manage this stress:
- Establish a support system of family, friends, and other military spouses who can provide emotional support and practical assistance.
- Use tools like video calls or secure messaging apps to maintain open communication about financial matters with your deployed spouse.
- Take advantage of military resources, such as the Family Readiness Group or the Military and Family Life Counseling Program, which offer support and guidance for families during deployment.
Financial Programs for Deployed Personnel
Deployment typically involves increased pay due to allowances like Imminent Danger Pay or Family Separation Allowance, which can vary based on location and deployment duration. This increase in income may seem like a financial boon. Still, it's essential to consider the additional expenses that can arise during deployment.
For example, maintaining a home in your absence can be costly, especially if you're a homeowner. You may need to consider property management services or arrange regular maintenance to prevent issues from developing while you're away. These costs need to be factored into your pre-deployment budgeting.
Similarly, family expenses can rise during a deployment. Childcare costs may increase if one parent is deployed, or there might be additional travel expenses if the family chooses to stay with relatives. These incremental costs should also be taken into account.
Having a robust emergency savings fund becomes even more critical during deployment. Unforeseen expenses can arise, and having a financial buffer can help to deal with these unexpected costs. If you haven't already, consider building an emergency fund covering three to six months of living expenses.
Deployed members of the armed forces have access to various exceptional benefit programs. These include the Department of Defense Savings Deposit Program, which offers a 10-percent return on deposits of up to $10,000. However, this program is available only to deployed personnel in designated combat zones. In addition, some deployed personnel are entitled to a daily spending allowance (also known as per diems).
Legal Protections and Tax Implications
One critical piece of legislation that all servicemembers should be aware of is the Servicemembers Civil Relief Act (SCRA). This law provides several financial protections to servicemembers, such as capping interest rates on pre-service debt at 6%, protecting against eviction while deployed, and allowing for the termination of housing leases in the case of deployment.
Deployed servicemembers may also qualify for tax benefits, such as the combat zone tax exclusion, which can help reduce tax liability. Consult with a tax professional or visit your installation's legal assistance office for guidance on these benefits.
Understanding these rights can help servicemembers avoid potential financial burdens during deployment.
The Takeaway
Deployment can be a financially challenging time for military families. Still, with careful planning, budgeting, and a thorough understanding of available resources and benefits, it's possible to maintain financial stability and take advantage of unique opportunities to save and grow your wealth. Remember, you don't have to navigate these challenges alone – take advantage of the many support services and resources available to military families during deployment.
