The way you handle your personal finances is important to the financial stability of every family. Military families face different challenges when planning for the future, especially when service members are deployed. For this reason it is especially important for members of the military to not put off getting their finances in order. The following tips can get you moving in the right direction to ensure your financial security.
Financial Planning Tips For Military Families
- Pad Your Emergency Fund. The importance of an emergency fund can not be stressed enough. While this is one of the most touted pieces of personal finance advice, there are still people who think they either don’t need an emergency fund or don’t know how to get one started. Financial experts recommend having 3-6 months of income saved in the event of an emergency. For service members who face deployment additional savings is required. Don’t wait until you receive your orders to start your emergency plan. Find ways to cut costs or increase your income now to avoid falling short in the future.
- Designate A Power Of Attorney. A spouse, trusted friend or relative should be designated to handle your financial transactions while you are away. It is important that the person left “in charge” has the legal authority to act on your behalf in the event decisions or actions are required to rectify a situation.
- Gather Your Information. To ensure everyone is on the same page, take time to list all of your financial obligations, account numbers, contact information and any other information that may be needed in your absence. You should also provide notice in writing to all your creditors and other financial institutions that you are being deployed; a copy of this notice should be given to your power of attorney as well.
- Review And Update Policies. Insurance policies are just that: insurance in the event something happens. To get the most from your policies, make sure you have investigated any special benefits that apply to military members while deployed. You should also confirm the beneficiaries are up to date and correct. Service members can save money on auto insurance if no one will be using their vehicle while they are away.
- Ask For Help. Seek guidance or support from other members of the military who are facing similar challenges. There are stateside organizations that can help you prepare for your deployment and guide you in getting your finances in order.
- Know Your Options. Even if you take all the proper steps to ensure your family and finances are taken care of in your absence, understand that no one can predict the future. Illness, major medical bills or other unforeseen circumstances may arise and you should know where you can turn in the event you can not pay your bills. There are certain protections extended to members of the military and knowing what options are available can make a difficulty situation more manageable.
When you factor in the possibility of tax-free income and other allowances, deployment may actually be a boost to your family finances. Have a plan in place for this extra income to ensure it is not absorbed into your regular budget. You can add it to your emergency fund, pay off consumer debt or invest it in your future.
Trisha Wagner is a freelance writer for DepositAccounts.com where you can compare rates of deposit accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.