The odds are good that you will deploy at least once during your military career. While this can present a set of challenges unique to each individual, it can also bring professional and personal opportunities like achieving your financial goals.
Deploying will almost always enhance your career, and it can also help you earn additional benefits through the VA that last long after you leave the military. There are also financial benefits, especially when you deploy to a tax-exempt combat zone. We took a look at some of the basic ways deployment can assist in paying down debt, increasing your savings, and more.
Financial benefits while deployed
When you deploy for longer than 30 days, you will be eligible for per diem and possibly family separation pay. Some service members who deploy overseas in support of a contingency operation may qualify for Tax-exempt Combat Zone Pay, Imminent Danger Pay, Hostile Fire Pay, and possibly other financial benefits.
Accelerate your financial goals
These benefits add up quickly. When used wisely, you can make incredible financial gains.
One of the best uses for extra income is to pay off any outstanding debt you might have. Start by paying off high-interest debt, such as personal loans, credit cards, auto loans, or private student loans. If you don’t have high-interest debt, consider paying off any other debt, such as your mortgage or federal student loans.
When Air National Guard Tech. Sgt. Dakoda Van Cleve deployed in 2019, he used his additional income to pay off the remaining student loans he took out before joining the military.
“Deploying was a great opportunity to pay off my student loans and even start an emergency fund,” he said.
Van Cleve mobilized again in early 2021 and used some of his income to make extra payments on the engagement ring he bought for his fiancé.
You aren’t limited to paying off debt
1st Lt. Jade Petersen deployed shortly after commissioning. She used the opportunity to pay off the remaining balance on her credit card.
“Paying off my credit card was nice,” she said. “But the bigger benefit for me was being able to save money toward a down payment on my first house.”
After returning from her deployment, Petersen used her savings and the VA Loan to purchase her first home.
Deploying brings additional opportunities to save and invest. One of the more popular options is the DOD Savings Deposit Program that allows deployed service members to deposit up to $10,000 into a savings account that offers a guaranteed 10% return. Deployed service members can also contribute additional funds to the TSP, up to the $58,000 Annual Addition Limit. The higher contribution limit can help you invest significantly more money for your retirement.
Have a plan before you deploy
It’s easy to see a growing bank account balance and want to spend it all. It’s OK to splurge a little. But do so with a plan. You may be better off using most of your additional income to pay off debt, save for a significant purchase, or invest.