Mark Henricks
Sponsored Article by USAA

Anne-Marie and David Tosh always had split bill-paying and other financial chores. When her husband was deployed to Iraq in April 2003, Mrs. Tosh took over.

“Anne-Marie handled everything,” Capt. Tosh says.

Luckily, the two had set themselves up for success. “The accounts were all in both of our names,” says Mrs. Tosh, who lives with her husband, now back from Iraq, in Leander, Texas. “For anything I didn’t know about already, he left information.”

Many deployed servicemembers leave somewhat more confusion in their wakes, says Meredith Leyva, the Norfolk, Va., wife of a Navy officer and founder of CinCHouse.com, an online portal offering ideas for managing finances during deployment and other help for military families. “In my husband’s first deployment, he had forgotten to pay a credit card bill,” Mrs. Leyva recalls. “It wasn’t clear on the statement how much money was owed, but when I called the financial institution it refused to give me any information because it was not a joint account. And that hurt his credit rating.”

Servicemembers who are single face different challenges. Navy Lt. Cmdr. John Baehr had an eviction scare when rent on his stateside apartment was paid a week late while he was in Kuwait for a year.  “Fortunately, the apartment manager gave me the benefit of the doubt and didn’t charge late fees,” says the San Jose, Calif., service member, who used his bank’s online bill payment and a helpful friend back home to handle most financial issues without problem.

Joseph "J.J." Montanaro, Certified Financial PlannerTM practitioner with USAA Financial Planning Services, says there is at least some opportunity deployment may result in a bit of a financial windfall for servicemembers.  “With the possibility of combat zone tax-free income and a host of allowances (separation pay, hazardous duty, etc.) added to the monthly bottom line, you may be able to use the additional income to pay off pesky credit cards, build your emergency fund, and even start-up or increase your automatic savings into a Roth IRA, Thrift Savings Plan, or College Savings Plan for the kids.” 

Smart solutions
•    The first line of financial defense is an emergency savings fund. Experts typically recommend that you work toward having three to six months of living expenses in such a fund. But Mrs. Leyva says if you’re facing deployment you should set aside at least $2,000 extra to deal with car repairs, plumbing leaks, and other unexpected bills.

•    Mrs. Leyva also suggests padding the fund for routine chores the deployed family member usually does, from lawn care to household cleaning.

•    If unused cars or trucks are to be stored, investigate savings on insurance that may be available.

•    If you’re single, you may be able to put all possessions left behind into storage, eliminating rent and utilities. If that’s the case, you should maintain rental insurance to protect your belongings.

•    The Servicemembers Civil Relief Act of 2004 may qualify you to receive a lower interest rate on mortgages and credit card debts and protection from eviction for late rent payments. Plus, you may be able to delay civil legal actions including bankruptcy, foreclosure, and divorce.

•    You can sign a power of attorney to designate a trusted friend or family member to handle your financial transactions. “If you don’t have a significant other or family member who can regularly take care of your small issues, make sure you take the time to list your account numbers and customer service phone numbers, and give that information to whomever you are giving power of attorney,” Lt. Cmdr. Baehr urges.

•     Finally, look to stateside organizations such as Army Emergency Relief and CinCHouse.com for guidance and support.

Making Lemonade out of Lemons
The good news is that deployment can lead to better overall financial management. “When I deployed, Anne-Marie completely took over, and it worked so well we left it that way,” Capt. Tosh says.

Pre-deployment: A financial checklist

Waiting until you get orders to deploy may be too late to start building a solid financial plan, so start preparing today. If you need help, refer to the following checklist:

•    Build an emergency savings fund. The fund should contain three to six months of living expenses. Include at least $2,000 extra to deal with car repairs, plumbing leaks, and other unexpected bills.

•    Deputize a trusted friend/family member. Ask someone back home to handle paying bills and other tasks. A power of attorney may be required.

•    Create a record of accounts. Take a copy with you when you deploy. If you’re married, make sure both spouses’ names are on all accounts. If you’re single, provide the information to a responsible friend or family member entrusted with power of attorney.

•    Eliminate rent and utilities. If you’re single, you may be able to put all the possessions you leave behind into storage, eliminating rent and utilities. If that’s the case, you should consider maintaining rental insurance to protect your belongings.

•    Set up automatic deposit, investments, and bill payment. For bills that can’t be auto-paid, investigate a bill payment service that will allow you to pay them online from anywhere you have Internet access.

•    Prearrange any loans your family might need. Don’t be afraid to ask for lower interest rates that recognize your service to your country. (The Servicemembers Civil Relief Act of 2004 may qualify you to receive a lower interest rate on mortgages and credit card debts and protection from eviction for late rent payments. Plus, you may be able to delay civil legal actions including bankruptcy, foreclosure, and divorce.)

•    Save receipts. Set up a folder to hold receipts and financial and legal documents in your absence.

•    Update life insurance, beneficiaries, and wills. This may include investigating special dismemberment benefits available on your life insurance policy and reducing or eliminating coverage on autos that won’t be driven while you are deployed.

•    Remember traumatic injury protection. Servicemembers’ Group Life Insurance now includes coverage called traumatic injury protection, which can help you and your family if you suffer a traumatic injury.

•    Notify creditors and other financial institutions that you are being deployed. Provide them, as well as your stateside deputy, a way to contact you with problems.


Joseph "J.J." Montanaro is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies.  Montanaro served in the U.S. Army for six years on active duty.  He is currently a Lieutenant Colonel in the U.S. Army Reserve.

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
About USAA

USAA, a diversified financial services company, is the leading provider of competitively priced financial planning, insurance, investments, and banking products to members of the U.S. military and their families. Named by BusinessWeek as 2007’s Customer Service Champion and ranked highest among financial services companies for customer advocacy in a Forrester Research survey, USAA provides convenient and accessible financial products to its more than 6 million members. For more information about USAA, or to learn more about membership, visit usaa.com.