Surviving a Military Paycheck Error – How to Resolve Pay Problems and Get Through a Cash Crunch

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Military Paycheck Error
No system is perfect. Especially complex systems managing hundreds of thousands of unique inputs and outputs on a biweekly basis. Inputs and outputs that frequently change based on dozens of different factors that can change at a moment’s notice. Of course, the system I’m referring to is the military pay system. I’m sure you guessed…

No system is perfect. Especially complex systems managing hundreds of thousands of unique inputs and outputs on a biweekly basis. Inputs and outputs that frequently change based on dozens of different factors that can change at a moment’s notice. Of course, the system I’m referring to is the military pay system. I’m sure you guessed that by the title of this article.

Unfortunately, the military pay system isn’t perfect. Errors can and do happen. And that’s not good when people need their paychecks to pay for basic living essentials such as food, housing, transportation, utilities, etc.

Military Paycheck Error

Common Military Paycheck Errors

In most cases, military paycheck errors are minor and quickly fixed.

I served on active duty for 6.5 years and personally experienced several small pay issues.

For example, I received an overpayment on an advance for a TDY was one such occasion. I didn’t want the advance, however, my First Sergeant required all lower-ranking Airmen on our TDY to take the cash advance. Unfortunately, I was overpaid, then I had to write a check to pay back the government.

I had the option of having the overpayment withheld from future paychecks, but I preferred getting it over with right away. Of course, I was also worried that having the pay withheld from future payments could cause additional pay problems.

Thankfully, no long-term damage was done. But it took a couple hours out of my day and took me away from work.

But some problems are much worse. I know people who were underpaid, not paid at all, grossly overpaid and had their pay docked for the next several checks, etc.

Government shutdowns have also stopped military members from being paid.

These pay problems can quickly cause a lot of damage. So let’s take a look at what you can do to help survive a military paycheck problem.

What to Do When the Military Messes Up Your Paycheck

The first step is to assess the situation. What happened? Were you not paid at all? Underpaid? Overpaid?

Contact your finance department, explain the situation, and see if you can sit down with them and walk through the problem and find a solution. Many military pay problems are small, and can be resolved over the phone, or with a quick meeting. But if your problem is bigger, you will need to do a little more work to find a resolution.

Resolving an Overpayment

Being overpaid can be almost as bad as being underpaid, because you will need to repay the excess amount of pay you received. As I previously mentioned, I was overpaid for a deployment when I was forced to take a cash advance I didn’t even want.

The solution for me was easy – simply write a check to the US Treasury Department for the amount I was overpaid (I think it was in the $400 range; which was not an insubstantial sum when I was an E-3 with a take-home pay of about $600 per pay period).

In other situations, you may be forced to repay more than you can write a check for in one fell swoop. In that case, your paycheck may be garnished by a certain amount each check until you have repaid the debt you now owe.

This can be a big problem if you are living paycheck to paycheck, or you regularly spend your entire paycheck each month. In most cases, you can work with the finance department to spread out the overpayment over several checks. But if you were grossly overpaid, you may need to figure out some form of payment plan that doesn’t take away too much of your paycheck.

Resolving an Underpayment

Being underpaid is rough. You need to keep paying for your living expenses, even if your paycheck is light, or if it doesn’t even show up. Not being paid is rare, but not unheard of. Non-payments are most common when you are changing status (being activated, deactivated, separating from the service, receiving separation pay, or receiving an enlistment or reenlistment bonus).

Underpayments can happen for a variety of reasons, including being deployed, going on TDY, going through a PCS, receiving a promotion, change in status, adding dependents, change in BAH rates, becoming eligible for additional pays and bonuses, etc.

Resolving an underpayment starts with contacting your finance department, explaining the situation, and waiting for them to rectify the situation. In many cases, your pay will be resolved in one or two pay periods. But in some cases, it can take longer. Situations that may take longer are often things like bonuses, separation pay, and similar payments.

Unraveling the Impact of Paycheck Problems

Thankfully, most pay problems are small. But not all. And even small problems can quickly become big problems if they aren’t resolved quickly. And the problem with paycheck errors is the initial problem can lead to further problems, such as missing payments, adding debt, incurring finance problems, and worse. So let’s review some ways you can get through this pay problem.

Dip into Emergency Savings

Everyone should have an emergency fund. How much you should have is up to you. But it’s best to start with at least $1,000. As a rule of thumb, I recommend everyone have at least one to three months of living expenses. That will help you manage most emergencies that pop up. If you don’t have one yet, make it your resolution to start an emergency fund. Be sure to top up your emergency fund once you have the situation resolved.

Speak to Your First Sergeant or Contact Your Service Aid Society

Your First Sergeant is your first line of defense and can help point you to resources on base, or in the local community. This can include a financial counselor or another financial specialist.

Each branch of the service also has an aid foundation that helps their servicemembers through tough times. Here is a top-level list:

In most cases, these foundations will offer interest free, or low-interest loans to help you bridge the gap. Some may also offer a small cash grant or other aid.

Work with Your Creditors

If your paycheck problems cause you to run low on cash, you need to get proactive. That means contacting your lenders and creditors. Explain the situation and ask if they will be willing to work with you. Some lenders may be willing to let you skip a payment, or may be willing to waive late charges or finance fees for your first missed payment. The key is keeping lines of communication open. They can’t and won’t work with you if they don’t know about the situation.

Communicate with Your Landlord

Contact your landlord if your pay issue may prevent you from making your rent payment on time. This is especially important if you are out of town on military orders. Be sure to contact your landlord and explain the situation and ask if they will be willing to work with you.

Raise Cash – Take on Extra Work, Sell Things, etc.

There are many ways to raise cash quickly, so you’ll need to be creative. This can include things such as selling items on Craigslist or Ebay, having a yard sale, taking on a part-time job, doing a side job for cash, etc. Your situation will be unique, so go with what you know and what you can do.

Use a Military Bank – They Are Often Willing to Work with Military Members on Pay Issues

Military Banking is a great way to go. Many military banking institutions will work with you on things like credit card payments, auto loans, etc., if you get them on the phone and let them know what is happening.

Some of them also offer temporary loans that can help you bridge the gap. NFCU, PenFed, USAA, and other military banks are often willing to work with servicemembers in situations such as these.

Get More with a Free USAA Secure Checking Account

Less Attractive, But Still Viable Options

These methods can help you bridge a short-term need for money. But they aren’t something you want to use with regularity. Use them as a band-aid, and work on paying off the loans as soon as you receive your back pay.

Tap into Your Home Equity Line of Credit

I don’t like this option very much, because you would be taking out a loan against your home to pay for living expenses. The only time this is a good option is if you know you can (and will) repay the loan quickly. Otherwise, it’s better to look at other options.

The reason this can be dangerous is that a Home Equity Line of Credit, or HELOC, places a lien against your home. failing to repay your HELOC can result in foreclosure. So only use this if you can repay the loan quickly.

Credit Cards May Be an Option

Another option, though less attractive, is using credit cards. I don’t normally recommend using credit cards to pay for normal living expenses, but it’s a different story when it is for an emergency. And credit cards are almost always a better option than taking out a short-term loan from a payday lender, title loan company, or other company that offers high-interest short-term loans. If at all possible, try to pay off your credit card as soon as possible. Here are some featured military credit cards.

The Worst Way to Handle a Pay Problem – Avoid at All Costs!

There are always lenders that are looking to take advantage of those in need. Avoid the following lenders at all costs – otherwise, you will spend way to much money to fix a short-term problem.

Payday Loans and Title Loans – The Worst Options

Perhaps the worst thing you can do is get a  payday loan, title loan, or other high-interest loans. They are quick ways to digging a deeper hole and can be difficult to get out of.

Interest rates on those loans don’t appear to be too bad at first glance, but they are usually represented as a percentage for the short-term duration of the loan. So what appears to be a 20% loan is actually a 20% interest rate for a week or two. But it can be over 300% for a full year! To put that in perspective, you might borrow $1,000 and repay over $3,000. There are better options available!

Note: There are laws prohibiting offering loans to military members that exceed a set interest rate. However, many lenders use fine print to avoid these, or simply “forget” to ask if you are in the military.

Plan for the Future – Take Control of Your Budget and Your Finances

Plan for the future. Once this situation is resolved, it’s a good idea to plan for something like this possibly happening again. It would be a good idea to use the separation pay and bonus to get current on any missed bills, and then save a little in an emergency fund for a rainy day. This will help you and your family avoid any potential financial surprises.

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About Ryan Guina

Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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  1. Michele says

    My son-in-law is on deployment orders right now. He is National Guard and had to stop working his full time Police Sargent job because of the Army’s call to deploy. They have not had a regular paycheck yet. What comes in is few and far between and not what he is supposed to get. They have been given money to help from both sides of the family and there is no more to get.

    Now the paycheck that is past due will not be here til the 23rd (and still not promised then). How are they getting away with this? They cant work their regualar civilian jobs because the Army is demanding their time but the Army isn’t paying and they always claim its a “coding issue”. No wonder their morale is in the toilet and their family who is about to have their mom or dad go away for a year has no money to live on! Take care of our soldiers and their families! They are worth more than this!

  2. Ryan says

    I was promised my reenlistment bonus by the end of June, and here it is now August and I still haven’t recieved it? This is ridiculous! My family needs the money bad, one of the reasons that I reenlisted for another six years, and I keep contacting finance, career counselors, my readiness NCO, and anyone that can explain to me what is going on? I need help here. I broke my rib and was unable to work for months, and thought I would be alright, since I was supposed to recieve my initial 10k installment, but unfortunately I was wrong and am still being led around, being given all kinds of excuses. We have systems that can guide missiles using a playstation controller in the Military, but we don’t have someone that can run the system that pays are Soldiers accurately?? This is a problem!

  3. Vanessa says

    My husband is in training for his job in Fort Lee, VA and we were promised BAH would be for our current home zip code where I live in Hollywood, CA as he has not received his permeant station. We received our first BAH and it is no where near what the BAH calculator states and what was promised by recruiter. Not only was he not paid for a month but now his paycheck is wrong. I don’t think telling people to have “emergency savings” is the answer. Everything has been not what was explained to us and is very frustrating. It is impossible for me to get answers from finance dept, even though I have POA and impossible for my husband to go to finance office on base because he is in school from 4am-5pm.

    • Ryan Guina says

      Hello Vanessa, I recommend calling the base finance office and ask them to assist you. If possible, you may need to go to a base that has these services so you can speak with someone in person. If that doesn’t work, I recommend contacting your husband’s chain of command, starting with his First Sergeant.

      I wish you and your family the best.

  4. Nubia Varner says

    Good Morning, I have a question What can you do when a Soldier receives an erroneous do pay do? What’s the fastest way to help a Soldier? Getting and AER loan?

    • Ryan Guina says

      Hello Nubia, The first place to start is with the member’s finance office. If they can’t resolve the situation right away, then I would go to their First Sergeant for additional assistance. The First Shirt should be able to recommend an on-base resource.

      Each branch of the military has some form of financial assistance program (Military Aid Society Office) that may offer short term loans. The Army Emergency Relief (AER) Loan is a good place to start – they are a non-profit that offers interest-free loans.

      I hope this points you in the right direction.

      I wish you the best, and thank you for your service!

  5. Sarah says

    Reaching out because we are at a loss. My husband and I are stationed in Germany, I’m command sponsored, but they are giving him single rate with no dependent OHA and utilities. We’ve been fighting finance since February on this. It’s May. 500 USD a month down. That’ll be 2000 USD by the end of this month. E4 so that’s a large chunk of money for us. It’s really pushing us to the limit. His First Shirt was furious that Finance won’t get off their ***** and fix their error. My husband has been into them 8 times now and each time they promise they will fix it. But last week his First Shirt PCSd away. It’s still not fixed. We can’t afford this much longer somethings going to give. It’s a choice between paying rent and living off a few hundred dollars a month now. We cry and fight about this daily. We live in a mostly unfurnished house because it’s our first duty station since getting married and my husband moving out of the dorms. It took almost three months until we could justify buying a bed and ditching the air mattress. Please any advice is appreciated.

  6. Brandy says

    My son is active duty Army and has not been paid for the last 3 pay periods. THREE. I have had to send him a few thousand dollars because, upon arriving at his active duty station, he had to purchase not only several items for his uniform, but food as well. They wouldn’t allow him to eat in the DFAC, something about his card. I am not financially able to keep sending him money when the Army is responsible for his pay. Any advice for this situation would be helpful.

    • Ryan Guina says

      Hello Brandy,

      Your son needs to speak with his First Sergeant to get his situated ASAP. The First Sergeant’s job is to ensure the enlisted members in their unit are taken care – this includes pay, housing, and other military benefits. They should be able to resolve this issue by visiting the Finance or Accounting office to take care of his pay, and the Pass & ID office or Human Resources office to take care of his ID Card.

      The First Sergent should also be able to help with a workaround that would allow your son to eat in the DFAC – whether that is a signed letter from his Commander or something else.

      This is a huge inconvenience, and there is no excuse for not being paid or not being allowed to eat in the DFAC. But the good news is he should receive back pay for the payments he did not receive.

      I wish you and your son the best.

  7. josie says

    My husband received an overpayment and we were forced to pay back 10690.00. we had just changed commands bought our first home and had our first child. because of the deductions from his pay each month along with the command change we began living paycheck to paycheck… losing more and more money overtime. literally -228 dollars every month. we never left the house, my husband was on the tips program, we paid for nothing but bills. we even had to utilize food banks to cover food costs… i havent even bought hygiene products and we still have to pay for our childs diapers etc. we went to navy marine core relief society and they refused to help. not even a partial loan. they said they only pay for past due notices or airfare to see family. now, our family is likely to have no christmas and no thanksgiving because of this military error. also, the first step should be filing for a financial hardship waiver in your document. unfortunately our family got ganged up by 5 higher ups saying to my husband you cant submit this, it makes it look like our fault. youre lying etc. basically threatening him to not submit the form, he got spooked and didnt and now we suffer. the only thing to do in these situations is to go into debt bc noone is willing to help you.

  8. Regina Dix says

    My son in law enlisted in the Army and they have not paid a dime of BAH to him. He is married with a child and one on the way. Now they are about to be evicted from their home and the stress is taking a toll on her pregnacy. The Army offered an emergency loan to help till they corrected their error, but they haven’t received that either. Where does she go for help! The army has totaly ******* tbem over!

    • Ryan Guina says

      Hello Regina, Thank you for contacting me. He needs to contact his First Sergeant and ask his First Sergent for personal attention to help get this issue resolved. He needs to explain the full situation and the full impact, and how it is interfering with his ability to meet his service requirements. He should also schedule an appointment with his base legal department to ask them for help in any civil matters.

  9. Lex says

    If I am not being paid by the Army as an AGR Soldier do I still need to report to work? The command nor DFAS can give me a timeframe as to when this will be rectified and this could take months. I have been trying to contact JAG and find a concrete regulation that covers this. I have also filed a congressional complaint that I am waiting to hear back from. I’m being made to come to work and do payroll, other actions and help reserve Soldiers with their issues, but my issues are not being rectified and all the while I am not being paid. Mentally this is truly bothering me and being angry is an understatement. How can a Soldier function or focus like this? Like nothing is going on and you’re still expected to be the same Soldier and keep your Military bearing all the while you don’t know how you’re going to pay your bills, take care of your household, and take care of your daughter. When a TPU Soldier has pay issues everything stops and pay issues is a pet peeve of mine. It becomes my top priority and I will work it until it is resolved, because I know the damage that not receiving pay can do to a Soldier as well as their household/family. At this point I have no faith in my command or the Army and if I could just walk away I would.

  10. Christopher says

    I would love it if I could have a few questions answered and get some advice because I’m pretty new to the military, and I feel like what I’ve been dealing with is absolutely ridiculous. Basically, I’m constantly getting ******* out of money that I earned or that is owed to me, usually because a higher rank in my chain of command told me the wrong thing, or did nothing when they were supposed to act on my behalf.

    The even larger problem is that I diligently report the issues, providing all supporting documents (and even spreadsheets that I created- -I’m an accountant in my civilian career– making my issue completely idiot proof), and nobody does a damn thing.

    As an example, when I transitioned from AD to Reserve status, I submitted my receipts and sat with my local Personnel Specialist while he filled out the form for Travel Expense Reimbursement. This was 8 months ago! I started following up with him after two weeks and started getting other, higher level people involved, even another administrative department from another location and DFAS helpline once I ran out of people to turn to.

    Still, nothing has been done after countless emails and discussing it with at least a dozen people up and down the chain of command. And this is only one of about 6 or 7 issues, but is probably the simplest most straight-forward, and should have taken absolutely no time and minimal effort to fix.

    In all, I am owed thousands, and there has been no progress on any of it, as far as I have been able to tell. It is almost impossible to even try to get someone to respond to an email or pick up a phone. As far as I can tell, these people are absolutely useless. I’d be more than happy to fix the problems myself, but obviously, it has to go through 25 approvals and be submitted by the designated personnel, all of whom appear to be incompetent and lazy.

    I recently went on my first Annual Training as a Reservist, which was completed 8 weeks ago. I still have not been paid!! And I’ve inquired about it at least a dozen times since then with both my chain of command and the administrative department… no response.

    I joined the military late in life because I still wanted to serve even though I started with a civilian career. As a result, I have many years of work experience in the private sector to compare to how things are done (or not done) in the military. I knew before joining that things would be different and there would be inefficiencies based on stories I had heard, but I had no idea to this extent. I am absolutely amazed and appalled at the same time. I have never seen so much waste and laziness in my entire life. I seriously am less and less proud every day, and I truly wonder how we could ever even win a shouting match, much less a full-scale war based on what I’ve seen.

    I would really like to know how I can get the money I’m owed and how I can make these people accountable without screwing myself even more. The main problem, as I see it, is that no one has any concern for any real consequences because they can’t be fired, and besides, for there to be consequences, other people that are probably just as lazy and unmotivated would have to do their job, so they play the odds. It would be great if they were motivated by a strong work ethic, or patriotism, or a willingness to learn, or something, but I’m just not seeing it. The only motivation that I’ve seen is driven by selfishness and the desire to advance, so that just basically means that they do the bare minimum required for the guy that writes their evaluation. Do I have any recourse? It’s just pathetic and sad.

    • john B says

      Dear, Chritopher,
      I can understand your problem. When I was active duty the military took care of the soldiers pay. I worked at a number of army Finance and Accounting Offices Active and inactive services for over 26 years. I have always put the soldier first no matter what the pay problem was. Just after I retired they started sending everything to DFAS for payment. Now, with only a few military the employees have no consequences like you said they pass the buck and don’t care about a soldiers pay. They only care about how much paperwork they can process with an hour.
      By the way the pay system is called Joint Military Pay System JUMPS’s. This pay system started back in 1972 by the army. Fort Carson, CO. was one of the test sights. I was station at Fort Carson Finance and accounting when they tested the system and when it went army wide in 1973. This pay system with a number of changes now process all the military branches. DFAS not only process military pay but also other departments of the government.

  11. DJ says

    I was paid for an XCTC (National Guard) that I had an STA for. Should I just treat it like an advance from the army knowing that they will find their error and recoup it monthly out of my drill pay that i dont rely on for income?

    • Ryan Guina says

      DJ, I would just contact the finance office and let them know about the error. If your pay is messed up, it’s also possible your points are messed up. You don’t want that to stay on the books and turn into an administrative nightmare. The sooner you get it corrected, the better. It’s always better to be proactive and contact them to make sure the pay is handled correctly. They will correct the mistake, and figure out the proper way to recoup the funds according to the regs. Waiting increases the chances of having more mistakes pile on. Not to mention that your duty is to report an error if you find one, regardless of whether or not it is in your favor.

  12. Diana says

    When I was active duty and later in Air National Guard I rarely had a pay glitch. However, DFAS stopped paying my children’s SBP annuity pay in Dec 2015. I wrote to my senator for help ( that just made it worse b/c DFAS then got their names and ssn reversed or something). I called DFAS about twice a month which always took an Hour out of my life to be placed on hold and not given any real answer as to the status (escalated) of reinstating pay. In Feb 2018 I FILED AN IG COMPLAINT. It took about 2.5 -3 months and we got two big lumps within a few week apart. That is going to cause A 7% Higher Tax Bracket which just isn’t fair. I’m going to ask my CPA if we can submit an ammended tax return for my daughter last year…and maybe the year before so we lower the tax bracket.
    Their Dad passed away in 2013. His new wife of one got all his life insurance..despite the divorce decree stating a certain portion was required for child support. Lawyer said I “ can’t sue a dead man” but never bothered to tell me that I should take Out and Addiotional ( my Own policy on the Ex). Why wouldn’t a lawyer tell me that…it is in the divorce decree that we each had to carry life insurance. Anyhow, there is a special place in Hell for the new wife of one year ( who only married him b/c he was terminal) who marries a terminal cancer patient just for the life insurance while the Mother Of his two minor children get nothing….except what DFAS SBP annuity ( that we started paying into 1996). They paid okay for 1.5 years and then went haywire. Said we owed them $70k PLUS 5% LATE PENALTY ..which they did NoT give us any 5% EXTRA IN ARREARS AFTER STOPPING PAYMENTS FOR 2.5 YEARS. Ruined my oldest daughter ( now adult) credit rating by reporting her to collections. She couldn’t even get a student loan. Sorry. I’ve vented now. I filled out the DFAS form NOt to w/h taxes because they were taking out double and not reumbursing is or getting it right on the 1099R. Active Duty, Guard Was SO much more sane come pay day.

  13. Tyler says

    I believe I might have been overpaid and I am trying to figure out what I might owe back to them (If I was truly overpaid). My question is, they come back for the pre-tax money, correct? So If I got paid $4196.70 (after tax), and I believe they were supposed to pay me $2797.80 (after tax), I should expect them to come back for that money, pre-tax. Assuming they taxed @ 25%, that would mean they actually paid me $5595.60 (pre-tax) and they were supposed to pay me $3730.40 (pre-tax). All of this meaning I would owe $1865.20 ($5595.60-$3730.40)….pre-tax money vs. | Owing $1398.90 ($4196.70-$2797.80)…post-tax.

    Correct?

    • Ryan Guina says

      Hello Tyler, Thank you for contacting me. To be honest, I’m not 100% sure how the military pay office would handle this. It depends on whether they overpaid you for base pay, which is taxable, or for a non-taxable benefit such as BAH, BAS, per diem, family separation pay, etc.

      I encourage you to visit your finance office. They should be able to identify your specific situation and help you understand what the error was, how much you were overpaid, and how much you will owe.

      The finance office should be able to arrange the overpayment to be withheld from future paychecks. Depending on the amount, it may be possible to break it up into multiple withholdings, instead of having it all withheld from one payment.

      Visiting the finance office will be the fastest and most accurate way to get answers. I wish you the best, and thank you for your service!

    • Ryan Guina says

      Hello Kayla, Thank you for contacting me. State and Federal Taxes are withheld every time you are paid (unless in a tax exempt zone). So you will have paid taxes on the extra income you received.

      However, the military can still withhold future payments if you were overpaid. They usually do this by withholding a certain amount from your future paychecks. If you are no longer in the military, it may be possible for them to withhold some of your tax return if they contact the IRS. The best thing to do is contact DFAS and ask them to review your file. They should help you understand what is happening with your situation and understand your options. Best of luck, and thank you for your service!

  14. Brian says

    Ryan, thanks for the helpful insight. I survived many pay SNAFU’s as a single sailor during the early 2000’s. I’m now a dependent, stay-at-home-dad managing our finances. My wife is due to begin terminal leave at the end of the month and we’ve just learned that her pay (O4, Medical) will likely be stopped early because of some draconian navy accounting practice. This poses a problem because even though we have a substantial savings, we’re selling our home and will need that savings for possible repairs to the house and unforeseen moving expenses. We’ll get reimbursed for many of these expenses, but I am predicting a serious deficit in our cashflow due to the loss of one months pay. We’ll be several thousand dollars in the red unless we use nearly all of our savings to cover the month’s pay.

    We survived a non-payment issue when my wife entered active duty three years ago with the help of the Navy-Marine Corps Relief Society. In short, it wasn’t that bad, but we depleted all our savings and maxed out all credit because we found ourselves homeless, unemployed, uninsured, and expecting our second child. Since then, we’ve proactively eliminated several liabilities, increased our monthly cashflow, and saved for separation. My wife and I feel embarrassed that we’ve lived comfortably, though responsibly, and now find that despite our well-funded position isn’t enough to handle this situation.

    Do you feel it’s ethical to ask our Relief Society for help covering the loss of one month even though I *might* be able to get by without it? Or do you think it would be more responsible to apply for a traditional loan that I can repay as soon as the (potential) underpayment issue is resolved?

    • Ryan Guina says

      Hello Brian, Thank you for contacting me. It sounds like you’ve done some good planning on your end. But some things are just out of your control. Visiting the Navy-Marine Corps Relief Society is a good idea. They may be able to give you some hands-on advice about how you can prepare for this, and if possible, they may be able to help you bridge the financial gap. The sooner you visit the NMCRS, the more time you have to plan for your transition. It will also give you the opportunity to take out a personal loan if needed. Living off credit cards may be another option, but I would try to avoid this if possible, unless you are sure you will be able to repay the balance within a month or two after separating from the service. I’d start with the NMCRS and see if they can offer more specific recommendations based on your situation. I wish you and your family the best!

  15. Joshua says

    This was a very good article, however it did not help in my situation. In 2013 I was medically retired for injuries received in Afghanistan. I went through 3 miserable years of what the Army calls the WTB (Warrior Transition Battalion), none the less during which time I had great leadership and our finance department insured everyone was receiving exactly what they were and WERE NOT entitled to.

    Well, I was divorced in December of 2011, I informed my finance department within the WTB that I needed my BAH stopped immediately. They did just that and life went on for the next couple of years in the WTB. I retired in July or 2013 and a few months later I receive a letter in the mail from the Treasury of Defense or some nonsense like that. I opened it up to be notified I owed the government…. no joke….$20,000 dollars. Yes, and they wanted a payment or payment plan IMMEDIATLEY!

    So after much research I found that they claim I was making BAH for the last 2 years I was active duty (but I wasn’t). I then called several phone numbers they provided and everyone I talk to said I was mistaken and that I definitely was making BAH. I went through many pay stubs and nope, I sure wasn’t making BAH. After months of phone calls and trying to find someone to help me, I decided the hell with them.

    This decision sort of irritated me because I take a lot of pride in trying to be smart with my money and my CREDIT. Well, now it’s on my credit and though it really doesn’t harm my credit that much, it does make sort of a wall that will not allow me to build my credit anymore….just stay sort of stagnate. I get a letter once in awhile to inform me that I need to pay them and to notify my how much the bill has grown (because they add interest of course!

    Anyways, hope anyone that reads this enjoyed my story of misery and if anyone has any ideas on how to fix this I would much appreciate an email!

    Best Wishes,

    Josh

    • Ryan Guina says

      Hello Joshua, Thank you for contacting me. I would contact DFAS and open a case to handle this. They should be able to go through copies of your LES forms to determine whether or not you received BAH or any other benefits. Then they should be able to remove the notice from the Treasury, or DoD, or whoever is trying to recoup your income. This isn’t something you want to ignore because it can have long-term implications on your credit, and possibly future withholdings. If this is something you haven’t had success with, or you feel is out of your league, then I would try contacting a veterans advocate or someone who can work on your behalf. If you want to go that route, then I would contact a Veterans Service Organization, such as the DAV, VFW, American Legion, etc. They may be able to help you directly, or point you to someone who can. I hope this is helpful. Best of luck, and thank you for your service!

      • Squirrel says

        I have a question about BAH type II. I am currently in the National Guard and was working on ADOS orders when I was notified that I was not receiving the right BAH. They fixed the problem but had to overpay me for it which wasn’t a big deal, but I had come back for AT this year and about a month later we all got an email stating that people with BAH type II would be getting a fix for something that had messed up. We where told to check our LES’s to make sure they where correct. I checked mine and since I still owed the debt I my check was depleted about 3/4 of the check. What I would like to know is I thought they couldn’t take BAH or your subsistence allowances from you. If you know where to find this out I would greatly appreciate it. I have looked all over the web to find the answer but can’t find anything about. I have tried to find out from DFAS but no luck there either. I have talk with my unit about it but nobody seems to know anything about it.

      • Ryan Guina says

        Hello Squirrel, Thank you for contacting me. I don’t have any references regarding the military not being able to take BAH or BAS if they overpaid you. In my experience, the military will always get their money back if you were overpaid, and it’s never convenient when it happens. The best I can recommend is to speak with the most experienced individual in your finance section. Best of luck, and thank you for your service!

  16. Lee says

    10. Call your bank. Navy Federal Credit Union offered to cover their military members during a shutdown and USAA pledged “to support members.” If you bank with military friendly bankers you’ll likely get support. Put that in your mind for the next phase of this battle…

  17. Romeo says

    Whoa! I understand that you are putting all the options out there, but listing the HELOC as an option? Tsk. Tsk. That’s how so many people got burnt in the past. 🙂 Nice post.

    • Ryan Guina says

      Romeo, I don’t recommend a HELOC for frivolous spending, but in an emergency, it can fill a need. The key is to remember how a HELOC works and the inherent risks involved. And in this hypothetical situation, back pay would have been quickly forthcoming, making it easy to pay off any lines of credit.

      ***at least I didn’t mention pay day loans, which I consider to be one of the worst financial options for anyone!

      • Ryan Guina says

        Great point, Lee. Many military banks understand their customers needs and are willing to work with them in the event of an emergency, deployment, military operations, etc. It always pays to be upfront and let your lender or bank know what your situation is.

    • JoeTaxpayer says

      Romeo – Years ago, we had a nice “emergency fund.” But as rates fell, its return was dropping to 1%. At the same time, it occurred to me that by throwing the whole thing at my mortgage (then 6%), I could drop from the 20+ years remaining to a lower rate 15 year mortgage (which, now has just over 6 left).
      I discussed this with the mrs first. Would she be comfortable with no real emergency fund, but a mortgage that was lower in both size and rate, and a HELOC on top. At this point, we have a small HELOC balance, but when the house debt is treated as one line item, it’s far less than where we’d have been otherwise. And using it to smooth out irregular income and irregular expenses has worked quite well. Our 2010 interest line on Sch A was less than half what it was in 2006. It’s a matter of discipline I suppose, but it works for us.

      • Thai Ngo says

        It’s great that you’re recommending all these options but it’s still not right for the Army to screw up Soldiers payroll when their family needs it especially if it’s 3-4 months late. Your lender doesn’t care. Taking out a loan with interest isn’t fair for the Soldier. No reason for the system to fail like this, dfas is not good enough.

  18. Pat S. says

    Although it looks like these types of steps may not be required. How close we all came to missing a paycheck makes it that much more important to focus on the emergency fund, and the financial basics. Its important to remember that there are no guarantees in life, and we all have to plan for contingencies like this!

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