Being financially prepared is a big part of overall Family Readiness. There are unexpected exercises, schools, training, and other temporary assignments that not only changes your military pay but may interfere with your civilian employment pay. Being mobilized can also present unique financial challenges. Here are some basic guidelines that should be considered prior to mobilization.
Soldiers and Sailors' Civil Relief Act (SSCRA):
Although all servicemembers receive some protections under the SSCRA, additional protections are available to reserve components called to active duty. Make sure you learn everything there is to know about this act. Under it, you could qualify for:
- Reduced interest rate on mortgage payments.
- Reduced interest rate on credit card debt.
- Protection from eviction if your rent is $2,400 or less.
- Delay of all civil court actions, such as bankruptcy, foreclosure or divorce proceedings.
Note that most of the protections SCRA offers are good only during your duration of your active duty assignment. For more on SCRA, see the Servicemembers Civil Relief Act Overview, or contact your unit or installation legal assistance office.
Direct Deposit: Direct deposit is the quickest and the most convenient way to receive your pay check. Plan for a week or two after you initiate direct deposit for it to be activated. The servicemember can be deployed to any part of the world, but having direct deposit will enable both the servicemember and family members to have easier access and more control of their funds. Check with your bank or credit union.
Financial Bills: Servicemembers are responsible for their household expenses/bills while they are deployed. These expenses could include rent, mortgage payments, car payments, credit cards, etc. Before deploying you should ensure that you have made arrangements for these payments to be taken care of. You may wish to appoint your spouse or family member with power of attorney, so that they can handle your finances while you are deployed. For more, see the Legal Preparation section.
Income Tax: If you will be deployed when your taxes are due, decide in advance how income taxes will be filed and who will do it. You may wish to file for an extension through the Internal Revenue Service by filing Form 2350: Application for Extension of Time to File U.S. Income Tax Return. For more on military taxes, see the Tax Center.
Allotments: An allotment is a portion of your pay that is automatically set aside each month for an individual, a mutual fund, creditors, etc. In the event of a deployment, a couple may choose to open a second checking account and set up an allotment for the servicemember. This is an easy and convenient way to make sure that both the servicemember and the family receive funds on a regular basis.
Leave and Earnings Statement (LES): Each month, the servicemember will receive a LES showing their pay for the preceding month and any changes that will affect their pay for the current month. The LES will also show pay for special assignments; allowances for food, housing, and clothing; leave earned and used; and what deductions were taken out of their pay for established allotments, insurance, and taxes. Also included is drill and retirement information. Units will often offer a class on reading an LES for both the servicemember and spouse prior to a long-term deployment. For more information on Leave and Earnings Statements, click here.