Deployments always come with mixed emotions. Military spouses sometimes joke about how much money they save when their spouses are deployed. I’ve even said that a time or two, usually to ease the blow of him leaving again. But sometimes you really can accrue a savings from deployment money. Or, the time separated can cost money. Most of that comes down to your financial decisions.
Budget is important
Before making any financial decisions, or taking any financial advice, make sure you are on the same page with your spouse. I know that military life and deployments put a lot of strain on relationships, as do finances. What works for one family may not work for another but do try to take some time to discuss it.
Each time my family has something change, we reevaluate our budget. Heading into a deployment means lots of changes, and some of them may not be immediately known. But doing some research and making some plans in advance will help make at least the bank account run smoothly.
Christine Maxwell of Her Money Moves is very upfront about the importance of a budget. “Deployment may hurt some military families financially, but for others the extra pay is a financial win,” she says. “Having a budget will help a military family make the most out of whatever financial situation they find themselves in.” She agrees that a budget can alleviate some stress leading up to and during deployment.
How much money are you actually looking at?
You have probably heard that you’ll make a lot of extra money on deployment, and while there are ways for military families to make extra money on a deployment, it’s not as cut and dry as you would like. Of course, most of this depends on the country of deployment. And, since income in some of those countries is not taxed, you can look at some extra there.
But to keep this as basic and applicable to as many people as possible, let’s look at this generically. At the lowest level of extra pay, you’re looking at family separation ($250) and hazardous duty pay ($150). Of course, there are about 60 other special duty pays that could be relevant to your specific deployment situation, but let’s start there.
With an extra $400 a month, you are looking at a good amount over the course of a deployment. Which adds up to $4,800 extra in a yearlong deployment.
What should you do with it?
There are several options on what to do with your extra money — you could pay off debt or boost your savings; but there are even more options. Maxwell touches on a few of these.
“Deployments offer some great opportunities for retirement investing strategies, opportunities that a civilian would never get to see. Deployed service members can enjoy tax-free investing of their income into a Traditional TSP or Traditional IRA as well as make excess contributions while deployed above and beyond the annual TSP elective deferral limit of $18,500 (for 2018).”
“There is also the Savings Deposit Program (SDP) where service members deployed to a designated combat zone can earn 10% interest on deposits up to $10,000,” she added.
There are rules and restrictions on these programs, but these should be something you and your spouse consider before heading into a deployment.
Not everyone is going to be able to maximize their contributions, and there is a balance to be found between saving for the future and paying off any debt. Maxwell agrees that families should consider treating themselves after a deployment, especially after working hard to keep to the budget. “I would hate to see a military family spend away all the hard work they put into saving their extra deployment income, but a family vacation when the deployed service member returns or extra childcare help for the spouse that stays home might be nice things to look forward to when a couple has the deployment blues. Remember that deployments don’t last forever, but neither does that extra deployment income.”
There is no right or wrong answer to your financial situation, nor what your family does with your deployment budget. But if you need help with it, please reach out to the many resources available.
