Serving your country in the military means a great many things for both those who serve and their families. For those defending our nation around the world, it often means sacrificing time with family and friends, in a job that might cost life or health. For families left back home during deployment, it means being without a spouse, parent or child, taking an incalculable toll on a family’s well-being. Often, it means financial stress as well, as one partner is left to deal with the everyday bills that keep coming.
Many organizations and scholars have studied the toll that military families must face before, during and after deployment. In a study released last July, a group called the Military REACH Team at the University of Minnesota reviewed a comprehensive list of studies, publications, and resources about the financial stresses faced by military families.
Although the study’s authors noted that the topic still needs to be explored, they found a number of unique effects on military families such as the pressures related to relocation; cash flow problems during deployment; difficulties in transitioning back to normal family life after deployment and problems related to separating from service. These factors are in addition to other life events that nearly everyone faces (but which cause unique pressure on military families) such as childrearing, effects on marriages, mental illness and others.
Previously in this column, we’ve discussed ways financial predators can prey on military families, including targeting military families with scams, ripoffs and predatory marketing and lending practices. But even day-to-day financial issues, such as paying bills, dealing with credit and money management can also hit families hard.
“Finances are often identified by service members and their families as one of their most significant stressors — even more than deployments and personal relationships,” said Corey Carlisle, executive director of the ABA Foundation (of the American Bankers Association). “Financial concerns at home make it extremely difficult for service members to focus on the mission at hand. Planning ahead as much as possible is key for the millions of military families who face unique financial challenges like deployments and relocations.”
As a military family, there are a number of things you can do to prepare for and lessen the stress caused by financial issues. To help, the ABA Foundation offered these tips:
- Contribute automatically to a Thrift Savings Plan. Military members have access to the federal Thrift Savings Program, which offers the lowest-cost retirement savings plan available. You can have automatic contributions withdrawn from your paycheck. The plan has about 4.8 million participants and provides advice and tools to help you manage your savings.
- Plan for deployment. Before deployment, have a family conversation about managing the household budget. Consider granting power of attorney to your spouse, should they need to make any urgent financial decisions while you are gone. Check with your bank to see if it has pre-printed forms you can use for bank accounts. Military personnel also receive additional funds while deployed. Decide on the best use for that extra cash, whether it is paying off debt or increasing Thrift Savings Plan contributions.
- Meet with your banker before active duty. The Servicemembers Civil Relief Act offers all military personnel entering active duty a variety of financial protections. It covers issues ranging from interest rate reductions to limits on debt accrual. Ask your banker about the key provisions of this law and how they can help you.
- Set up automatic bill pay. Whether you’re stationed stateside or overseas, automatic bill pay will give you and your family one less thing to worry about each month. It can be particularly helpful during deployments in regions where internet access is unreliable and mobile banking isn’t an option, and it is generally more secure than mailing checks.
- Consider housing options. With mortgage rates at notably low levels, home ownership may seem like a no-brainer. However, service members should consider their options. Frequent relocations and deployments can make owning a home challenging and expensive. Renting may be a smart option for short-term assignments. Decide what’s best for your family and your finances.
- Consult a financial adviser. Schedule a visit at a Personal Financial Management Program office, located in your military and family support centers. They offer free one-on-one counseling, as well as other financial education resources.
- Finally, ask for help. If you get into a serious financial situation, there are numerous resources which can help and advise you. For example, the office of the Mississippi attorney general has a list of tips and resources on its website at http://bit.ly/2qsEB7M.