Money management tips for deployment

Many of us can trace at least one of our impulse buys to a stressful moment or event. A deployment can be that trigger.

As a retired U.S. Air Force lieutenant colonel, I understand this from personal experience. During or after a deployment, it's often tempting to spend extra money on items you want but truly do not need, like a motorcycle or a nice piece of jewelry. It's such a stressful time that in a lot of ways, you feel like you deserve something special and nice.

Deployment can be daunting from a financial perspective. But like any lifestyle change, preparation is the key to success. Read on for advice on how to ready your finances for the challenges of deployment.

Create a deployment budget.

Service members typically earn more money during deployments. First, there's the Family Separation Allowance, which is paid when a military member has to be away for more than 30 continuous days.

Then there's Hostile Fire Pay, which is paid to military members deployed to a combat zone.

On top of that, any form of military pay earned while on deployment in a combat zone is generally excluded from federal income tax.

But just because you're making more money doesn't mean you'll have a budget surplus. Often, military families move closer to their extended families for added support during long deployments. Maintaining two households brings additional expenses.

The bottom line: As you prepare for a deployment, update your budget to reflect all of your income and expenses. If it's been a while since you've created or updated your budget, jog your memory with our advice and tips on how to budget.

Take care of all bills.

Consider this important statistic: Your payment history makes up 35% of your credit score. If your bills aren't paid on time while you're deployed, your credit will likely take a hit.

You may think you'll have the ability to manage your finances and pay your bills from your deployed location, but expect the unexpected.

When I was in Afghanistan, a rocket attack took out our internet for three days. I wasn't worried about my bills being paid because my wife handles the day-to-day finances. Considering how much time I spent away from our home, it just made sense for us to work the finances that way.

Before you leave home, make a plan for how your bills will be paid while you're deployed. You can set up automatic bill pay or ask someone you trust to pay your bills.

Even if you do end up with the ability to pay bills from your deployed location, you'll appreciate having that financial burden lifted.

Cancel services you won't need while you're deployed.

As you think through your upcoming bills, ask yourself the following questions to determine whether there are easy opportunities to save money while you're gone:

Should I cancel Netflix while I'm deployed?

If your family will use it while you're gone, probably not. If you can access it from your deployed location and will have time to use it, Netflix or other streaming services can be a handy mental escape.

But if you answered both of these two questions with a resounding “no”, then cancel and save that monthly bill. While you're at it, don't forget about other monthly services, such as Amazon Prime, Hulu, or Disney+. Before you act, consider any early termination fees that might apply.

Should I cancel my car insurance before I deploy?

Unless you're getting rid of your vehicle, definitely not.

But your policy may need to change while you're gone. If you and your family won't be driving the vehicle, you can put it in storage and save some money.

Putting your car in storage doesn't mean you actually need to get a storage facility to house it. You're just declaring that you won't drive the vehicle. Therefore, there's less of a risk of an accident and you may be eligible for lower premiums. Check out these smart tips for long-term vehicle storage for more information.

Should I cancel my home utilities before I deploy?

If you're keeping your home or apartment, you probably don't want to cancel all utilities. Keeping your home cooler in the summer helps protect your furniture and electronics. In the winter, you'll want the heat turned on to avoid frozen pipes, which can be a huge disaster.

But you may not need home internet, cable TV or a home phone — unless, of course, your security system depends on it.

If you find opportunities to lower your expenses during your deployment, reallocate those funds toward other financial goals. This is your chance to emerge from the deployment in better financial shape than when you entered.

Put someone you trust in charge of your financial affairs.

A power of attorney allows someone else to make financial decisions on your behalf if the need arises. Choose this person carefully. You want somebody who's trustworthy but also capable. Think about how they manage their own affairs before you put them in charge of yours.

Need help drafting a power of attorney? Contact your nearest Judge Advocate General's office for free legal help.

There are also other powers of attorney that you should consider. Check out this article to learn about the different types of powers of attorney and which ones make the most sense for military members and their families.

Review your life insurance before you deploy.

Is Servicemembers' Group Life Insurance (SGLI) all your family will need if the worst-case scenario happens? This is a good time to consider private life insurance. When you eventually leave the military, you'll have to replace SGLI. Securing private life insurance now, while you're at your youngest and healthiest, may allow you to lock in the best rates.

Make some more money.

The Department of Defense's Savings Deposit Program (SDP) was established to give service members a chance to invest in their financial savings through a military savings account.

Service members are eligible while they're serving in a designated combat zone or are receiving hostile fire or imminent danger pay as they serve in a Qualified Hazardous Duty Area.

SDP currently pays 10% interest per year. You can use the interest earned to finance long or short-term goals.

Use SCRA to your financial advantage.

The Servicemembers Civil Relief Act (SCRA) provides financial and legal protections for service members and their families. The SCRA also applies to Guard and Reserve members when they're called to serve.

SCRA can help you save money by lowering your interest rate or getting out of a lease. As you take a look at your finances, see if SCRA can help you save money. Learn more about SCRA protection in our article Top 10 things to do before deploying.

Have some fun!

As you prepare for deployment, think about how to use any budget surplus toward your financial goals. You may decide to pay down debt, save for education, shore up your retirement savings or finally build that emergency fund.

Even in the midst of these financial goals, USAA believes in setting aside up to 10% of extra deployment income for fun items. You've earned it.

A word of caution: Don't be tempted to trade deployment stress for financial stress. Plan a post-deployment escape that fits within your budget so you can return relaxed and reconnected without extra debt.

Use discipline as you prepare for deployment.

You probably began preparing for this deployment months ago through tactical training, education, physical training and physical exams. Just as you've prepared for the military aspects of your deployment, remain disciplined in your financial approach to deployment.

Having a plan before you deploy not only keeps everyone involved on the same page, but it also helps to reduce stress.