8 Ways to Prepare Your Finances Before a Deployment
Planning how to handle your finances before you deploy can make this big change a little easier for you and your family.
Bottom Line Up Front
- Preparing your finances before deployment can reduce debt challenges, fraud and more.
- You may have access to special protections and benefits while on active duty.
- Numerous resources are available to protect servicemembers and their families’ finances.
Time to Read
July 12, 2022
When you’re preparing for deployment, there’s so much to do! One of the top items on your list should be creating a plan for how you’ll manage your finances, so they’ll run smoothly while you’re away. This checklist can help you get organized.
1. Find out how your pay will change while you’re deployed.
You may qualify for a number of allowances and different types of pay, which could increase your monthly income. This is a great opportunity to build savings or pay off debt.
2. Automate regular bills or use mobile banking.
Rent or mortgage, car payments, credit cards and utilities are all examples of bills you can “set and forget.” You can set up automatic bill pay in minutes and not have to worry about asking anyone else to handle your finances while you’re away. It’s also a good idea to set up overdraft protection.
If you prefer to handle your finances directly, many banks and credit unions like Navy Federal Credit Union have mobile apps* that allow you to pay bills, transfer funds and track spending on the go.
3. Learn about available benefits and financial protections.
The Servicemembers Civil Relief Act (SCRA) provides legal and financial protection to eligible active duty servicemembers. Confirm your eligibility before a deployment to determine which benefits and protections you have access to.
- If you’re active duty, your creditors can’t charge more than 6% interest for debt you incurred before you entered active duty, as long as you notify them of your active duty status and provide them with your written orders.
- While on active duty and 1 year after that, creditors can’t foreclose on your home unless it’s because of a court order.
- You can terminate some lease agreements in certain circumstances.
4. Learn about federal tax advantages.
Active duty servicemembers qualify for special federal tax treatment for certain types of pay. For example, you may not have to pay tax on most allowances or pay earned while in a combat zone. You can defer income taxes if your ability to pay is “materially affected” by your military service, and you get an automatic 2-month extension for filing and paying your taxes if you’re on duty outside the United States. Plus, if you’re in a combat zone, filing deadlines are extended 180 days beyond the end of your service in the combat zone.
For a detailed list of the different types and amounts of pay you earned, you can get a Leave and Earnings Statement (LES) for the tax year by calling 1-888-332-7411. Tax help available to servicemembers includes:
- on-base tax help at many military installations
- free tax-filing software from the IRS if you earn less than $73,000
- free tax software, preparation help and financial counseling (funded by the Department of Defense) through Military OneSource —available online or by calling 800-342-9647
5. Review insurance policies.
Consider whether you have enough life insurance and make sure the beneficiaries listed are up to date. A simple way to estimate the coverage you should have is to multiply your salary by the number of years you’d need to replace it and add in major debt (like a mortgage or student loans) and future needs (like child care or college expenses). Then, subtract any savings and your current life insurance coverage.
If you need help setting up a life insurance policy, call Navy Federal Investment Services.
6. Request a free active-duty alert to be placed on your credit file.
An active-duty alert will help protect you from identity theft while you are deployed. It triggers businesses to verify your identity before issuing any credit. You also can authorize someone to act on your behalf to confirm your identity.
You only need to request an active-duty alert from 1 credit reporting company—Equifax®, Experian® or TransUnion®. That company will notify the other 2 to place an alert.
7. Tell your credit card company you’ll be deployed.
If you plan to use your credit card while overseas, make sure your credit card company puts an alert on your account with your deployment dates. That way, you won’t have any issues if they see you’re using your card outside of the areas where you normally shop.
While you’re at it, check on whether you’ll have to pay foreign transaction fees. Although Navy Federal doesn’t charge these fees on our credit or debit cards, other institutions may.
8. Learn about military relief organizations.
Relief organizations provide servicemembers and their families with financial assistance in times of need. While you’re deployed, a family member will need a power of attorney or a preauthorization form to receive services without waiting for your permission.
Contact the appropriate relief organization for a preauthorization form to leave with your loved one:
- Army Emergency Relief
- Navy-Marine Corps Relief Society
- Air Force Aid Society
- Coast Guard Mutual Assistance
Navy Federal is committed to providing strong support to our servicemembers and their families, whether stateside or deployed. If you’d like to read more articles on topics like relocation, transition to civilian life and financial readiness or are interested in our military exclusives, visit Military Life.
- Do your research. Look into federal tax advantages and special active-duty protections or benefits you’re eligible for that can minimize your financial risk while you’re overseas.
- Build a budget that incorporates your new allowances and payments to determine how much money your family will have during active duty. Use this budget to make a plan for bill repayment and contingency planning.
- Be proactive with your family’s finances by setting up credit fraud protection and adjusting your life insurance policy as necessary. Navy Federal can help you determine what kind of coverage suits you best.
This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.