While you are away, the base pays for most of your needs – board, lodging, food, etc. You also receive a lot of incentives and bonus pay (e.g. combat pay, hazardous duty pay, family separation allowance, etc). This is probably the military’s way of compensating for the sacrifice that you are going through during deployment.
It may seem like this is a great opportunity for you and your family to save money. However, not everyone is able to save. In fact, there are some service members who fail to save and land in debt while they are deployed.
You need to learn how to maximize your military pay while you are deployed. All the additional pay that you will receive will really help you get financially ahead.
How to keep your military pay safe during deployment
Make it a habit to check your credit report
While you are deployed, you need to make a habit of getting a free copy of your credit report. This is the best way for you to check your credit transactions and make sure that you have not become a victim of identify theft. Sometimes, people are able to get your personal information and use it to borrow money in your name. In case you find any inaccurate information on your credit report, you need to get in touch with the authorities immediately – starting with the three major credit bureaus (TransUnion, Equifax, Experian).
Create a budget plan
This is your best defense against overspending and unnecessary debt. It is also the best tool that you can use to make smart financial decisions. This does not have to be too complicated. Just make sure it shows your income and the various expenses that you spend on each month. You can see if you are making unnecessary expenses and rank your financial obligations by priority. What you will see on this budget should give you insight on what you should change about your spending habits.
Pay your bills on time
Your financial obligations will not change while you are deployed. Admittedly, it is easy to forget about your credit card bills while you are in hostile territory. This is why you need to set up autopay so your financial obligations are paid off. Failing to pay your dues on time will keep your credit score from being ruined.
Understand how you are protected
Due to the nature of a military career, the government provided a lot of laws that protects their rights and benefits. You have the SSCRA or the Soldiers’ and Sailors’ Civil Relief Act. Also known as the Service Members’ Civil Relief Act (SCRA), this law caps the interest rate that can be applied to the credit account of military men and women. You need to be aware of what these are so you can apply them according to your credit and financial needs.
Have a debt payment plan
If you owe money before deployment, you will not be exempted from paying them back. It is important that you create a repayment plan so you will not forget to pay it off. You can set up an autopay that will ensure that all payments are met.
Ask for a credit limit increase
If you want to improve your credit score but you know that you cannot immediately pay off your existing balance, you may want to try to have your credit limit increased. This will improve your credit utilization and in effect, your credit score. Of course, you need to exert self-control to ensure that you will not use this extra credit for unnecessary purchases.
Control the unnecessary expenses
Most of the time, you will feel the need to destress and retail therapy can really work. Buying a new gadget or things for the family might help ease the emotional stress that you are feeling. Try to limit your expenses and do not let your emotions rule your spending decisions. If you can live without, then it might be best not to buy it.
Be cautious of identity theft
The fact that you are physically away means you will be doing a lot of your transactions online. You need to be careful of how you will do your transactions so you will not be a victim of identity theft. You should also be careful of any paper trail and important documents that you are throwing away. Shred them and make sure your details cannot be pieced together. Any documents that will be sent to you should be towards an address that you trust. Do not be too quick to give your details – especially if it involves your personal and financial data.
Avoid major debts before deployment
Hold off any major debts before you go into deployment. At least, for unnecessary debts. Hold of credit purchases for expensive electronic devices and gear. Laptops or mobile devices that you can use to communicate with your loved ones is okay. But other than that, hold off the use of credit.
This is a great way to be proactive with your investment goals. Automate the withdrawal from your account to your investments. When you do not see it, you will not really miss the money and you will not go through the temptation of spending the money on something else. You will also be building a significant amount in your retirement fund.
Be prepared for emergencies
Always have an emergency fund. Your savings can be really useful when someone gets into an accident or even if an investment opportunity comes up. Being prepared for the unexpected will help you avoid debt and maximize the potential for a passive income.
Monitor your salary statements
Make sure that your compensation is updated. Sometimes, documents get lost or delayed as you transfer bases. Any promotions, incentives, or bonuses might not take effect in your next paycheck. You need to monitor this so you are sure that you are getting your just compensation.
Take care when sharing information
If you are signing up for something or buying an item online, make sure the site is trustworthy and reliable. Even your email should be protected. Change your passwords all the time and use a combination of letters, numbers, and symbols.
Update your RED
This is the Record of Emergency Data. This is to ensure that in case something happens to you, the right people will be notified. This will also help in the processing of any benefits that your family should receive. Make sure you also look into your insurance policies – update the list of beneficiaries.
Manage your Temporary Duty
The TDY is your per diem rate. You need to learn how to budget and manage this amount so you will not fall short. You might end up having no money in between paychecks. Make sure you spend this wisely so you will not run out of money when you need it the most.