Setting Financial Goals During Deployment

For some military families, a deployment is an opportunity to save money, or pay off debts. “With the possibility of combat zone tax-free income and a host of allowances (separation pay, hazardous duty) added to the monthly bottom line, you may be able to pay off credit cards, build your emergency fund or even increase your automatic savings into a Roth IRA, Thrift Savings Plan or College Savings Plan,” says J.J. Montanaro, a Certified Financial Planner for USAA.

“We’ll save as much as we possibly can,” says JoNell, whose husband, a Master Sergeant in the Air Force, is about to deploy. “Our grocery bill will drop, and we’ll get rid of his truck before he goes.” Military spouses find lots of ways to save while their husbands are overseas. Jennifer, who is married to a Captain in the Marines, figures out how much money she needs to live on during the deployment. The rest of her husband’s paycheck goes into a separate account. “It’s easier to save if I never see it!” she says. Alyson, the wife of a Private First Class in the National Guard, lives off her own paycheck and puts her husband’s salary directly into savings, to better handle that salary, here is a guide on how to access pay stubs. She hopes to have saved $30,000 by the end of his deployment.

But Michael Kothakota of Wolfbridge Financial says no matter how good you are at saving, there some pitfalls to avoid. “Sometimes the wife wants to do something nice for her husband or the kids… or if you’re single, you may come home and feel like you need to splurge.” Kothakota recommends fighting that urge. “Consider which will help more – a splurge item, or paying off debt or starting an emergency fund.”

Joanna has been through several deployments with her husband, a Lieutenant Commander in the Navy, and they’ve developed a system. “The Golden Rule in our family is that hazardous duty pay is not play money for me. It’s set aside and it is not to be spent during the deployment.” When Joanna’s husband comes home, he can spend that money however he wants.

Saving money during the deployment isn’t just up to the spouse at home. Most military personnel have access to the internet while overseas, and that makes online shopping a convenient distraction. Owen, a Sergeant First Class in the Army, says it’s hard to resist ordering the luxury items he’s been missing. “I have to remember that my wife’s the one who’s going to get the credit card bill!”

In Next Month’s Digest, Part III of our Deployment Finances series: Retirement Planning.

Read about Katie’s financial misadventures.