FORT BRAGG, N.C. - For Soldiers, being deployed not only means leaving behind Family and friends, but mortgages, car payments and other bills as well. The temptation to overspend while deployed and upon the return is also a big concern. Homecoming, especially, can tempt overspending as it's celebrated.
Soldiers, both married and single, should understand the importance of money management before, during and after deployment so they don't get themselves in financial trouble. Fortunately, being a member of the military gives Soldiers and their Families access to free financial and legal services that can advise the best ways to invest and save money.
Lynn Olavarria, the financial and readiness program manager at Army Community Service, advises Soldiers that the Fort Bragg Financial Readiness Program is available to assist with one-on-one budget counseling.
"We are the ones to come to for information on savings programs, and other financial issues as well as using credit wisely," Olavarria said.
Staying financially fit during a deployment is not as hard as it might seem. As a Soldier, if you know and understand your pay and entitlements regarding your deployment, you can budget your money accordingly. Be sure to check with your unit's administrative section to confirm what you will be receiving. Then work with your Family members to keep spending within the means of your pay grade.
Deployments are a perfect time to save money and pay off bills. By living within your pre-deployment pay while you are gone, you will be able use the extra income to pay down debts. By adopting a savings routine while deployed, you can make the juggling act with your finances easier and new expenses that pop up less stressful to handle.
Olavarria recommends Soldiers look into the Savings Deposit Program. This program is for Soldiers who are deployed and allows them to deposit an amount up to their current unallotted pay into a government savings program.
"The money Soldiers deposit into this savings program account earns 10 percent annual interest on amounts up to $10,000 and is compounded quarterly," said Olavarria. "Soldiers an make their first deposit once they arrive in theater and their money will continue to draw interest up to 90 days after they return."
After 90 days, the money will be moved into a direct deposit account, unless the Soldier says otherwise. To enroll in this savings program, go through the My Pay portal.
Let's look at what a typical Soldier's deployment entitlements are:
Family separation allowance. This entitlement is given to any servicemember deployed away from their Family for more than 30 days. If you are deployed to Iraq or Afghanistan, this pay will show up every month you're deployed. It ends when you come home.
Combat Zone Tax Exclusions. If you're receiving hostile fire pay because of assignment to a combat zone, the pay will be tax exempt. Although this means an additional amount in your paycheck, be mindful that this change in income may affect your taxes the following year. Any taxable income above the threshold of $7,363.30 monthly gross pay is subject to federal and state income tax.
Hostile Fire/Imminent Danger Pays. Depending on where you're deployed, if you're eligible you may receive this pay of $225 per month.
Per Diem. This is money paid out for each day you're deployed if the deployment is longer than 30 days. This pay will usually show up when you get home. You must submit a travel voucher upon completion of your tour in order to receive this pay which is normally $3.50 per day.
Hazardous Duty Location Pay. This is a monthly payment for certain deployments. In Iraq and Afghanistan, you should receive this pay of $100 per month.
Now, once you understand what you are entitled to and how much you will be getting, you have to track your finances. You'll want to check your leave and earnings statement regularly, or have your spouse or other Family member do so, to make sure you are receiving what you should be receiving. You can do this at http://mypay.dfas.mil/milpay.aspx.
Be careful if you notice that you were accidentally overpaid. If it happens, be sure to report it as soon as possible to your administrative section. Don't make the mistake of spending that extra cash, because you will be required to pay it back. Depending on the circumstances, that repayment could be taken in one large sum, or in several small payments. With most Soldiers' luck, it will be in one lump sum and that could put a deep hole in a bank account if you are not prepared for it.
A good rule of thumb is to live off your usual financial plan if you have one. Basically, live within your means. Your school of thought should not be "extra money equals extra pay." Save as much as you can and put away as much as you can. Make sure you can always handle your bills. It's important to make sure that your trusted Family members have an understanding of all bills that need to be paid as well as having access to the necessary accounts to pay them. How can you make this easier'
Make a detailed list of your bills and when they are due.
Set up automatic payments for any bill that is recurring, like car payments and mortgages.
Make sure your Family knows if there are other bills that need to be handled differently.
Communicate with your Family before you leave and make sure you agree on your budget and are honest about your expenses.
Try not to overspend before the deployment and keep an ongoing checklist of your bills.
Make a budget before you go and keep communication open with your spouse about what you are spending.
You might consider opening up a separate account for deployment spending so you are less likely to overspend, risking your finances.
Some resources for Soldiers and their Families to check out online are www.dod.mil/dfas/, www.military.com/benefits/military-pay, and militarymoney.com. Remember that planning now can help you avoid financial trouble later. If you wish to take advantage of the Fort Bragg Financial Readiness Program, call 396-3670.
(Editor's note: Information for this article was contributed by Lynn Olavarria, Financial Readiness Program manager at Army Community Service and at www.militaryonesource.com.)
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