Financial plans, guidelines, and resources for military families are very different from those of non-service members. Service members have a harder time trying to handle their finances while they are deployed and when they return from deployment. Making poor financial decision can be damaging to service members. Service members making poor financial decision can have severe consequences such as lose their security clearance, face criminal sanctions, or be discharged if they find themselves in serious financial trouble. A service member losing their military career can also negatively impact their financial situation.
In order for service members to make the right decisions it is important for them to acquire information regarding how to make smart choices about savings, credit, mortgages, and a host of other life issues. There are a variety of resources available to assist service members and their families make smart financial decisions. Kiplinger and the Better Business Bureau have partnered to produce a Personal Finance Guide for Military Families, where service members and veterans can find practical, easy-to-understand information. Listed below are a few tips from the Kiplinger-BBB personal finance guide for Military families:
Grant a power of attorney– One of the most important documents to have in place when you’re deployed is a power of attorney, which gives your spouse or another trusted family member or friend authority to handle your finances while you’re gone. You can grant a general power of attorney, which authorizes your representative to file your taxes and conduct financial transactions. It is also beneficial to have a power of attorney to assist with submitting or signing documents that may be needed for enrollment at your on-line university.
Automate your bills– If you do not have a spouse or family member at home to pay your bills, make it as easy as possible to pay them yourself. Sign up to have them paid automatically from your checking account or to pay them online. Find out how to access your bank account and credit card records while deployed, so you can catch any errors before you return home.
Contact service providers- If your family will not be using your cell phone, cable, Internet, phone or other services while you are gone, be sure to let the service providers know. Make sure bills do not accidentally pile up while you are away, which can build up late fees and cause serious credit problems when you return home.
Extra emergency fund- It’s always important to have an emergency fund so your family will not land in debt if they have unexpected expenses. Nevertheless, it is even more important to prepare for these possibilities if you are about to deploy. Try to build up at least six months’ worth of expenses in a safe and accessible account, such as a money market or savings account. You want the money somewhere that is easily available to your spouse for any emergency home improvements, car repairs or other unexpected costs.
Savings deposit program- Service members have access to one of the best savings deals when they are deployed. You can invest up to $10,000 in the Savings Deposit Program and earn 10% per year in interest, guaranteed, until three months after you leave the eligible region. You can only sign up for the Savings Deposit Program after you are deployed, but you can plan ahead to determine how much money you can afford to invest and find out the steps you’ll need to take.
Programs like Military Saves, part of the Department of Defense’s Financial Readiness Campaign, encourage military families to make positive financial decisions. For more information regarding these resources, you may go to the Consumer Financial Protection Bureau website. There is also free financial counseling through Military OneSource and Consumer Credit Counseling Services, you may visit the Military OneSource website at www.militaryonesource.mil/ or call 800-342-9647 for more information.
By Shalena Gonzales
Financial Aid Specialist, American Public University