Finances Downrange: Smart Money Moves While Deployed

Deployment brings unique financial opportunities and challenges. Planning ahead can set you up for success both during and after your service.

Taking Advantage of Deployment Benefits

Deployment often unlocks benefits that can significantly boost your financial standing. One key benefit is the Savings Deposit Program (SDP). This program allows you to deposit unallotted pay into an account earning a guaranteed 10% annual interest. This is significantly higher than most civilian savings accounts. Maximize your contributions to the SDP if possible, as it’s a risk-free way to grow your savings quickly.

Another benefit is combat zone tax exclusion. This means income earned in a designated combat zone is tax-free, leading to a higher net income. Understand the details of this exclusion and how it applies to your specific situation.

Consider utilizing other benefits like Servicemembers’ Group Life Insurance (SGLI). While you hope you never need it, it provides valuable financial protection for your family at a reasonable cost. Review your coverage to ensure it meets your current needs.

Managing Expenses and Debt

While deployed, you often have fewer opportunities to spend money, allowing you to save a larger portion of your income. Create a budget to track your income and expenses, even with reduced spending options. Allocate funds for savings, debt repayment, and potential future investments.

Aggressively pay down high-interest debt like credit cards. The SDP interest rate of 10% is a good benchmark; focus on debts with higher interest rates first. Consider setting up automatic payments to ensure you stay on track.

Be wary of scams and predatory lending practices that target deployed service members. Never share personal financial information with unverified sources. Report any suspicious activity to the appropriate authorities.

Planning for the Future

Deployment offers a chance to think strategically about your financial future. Consider contributing to retirement accounts like the Thrift Savings Plan (TSP). The TSP offers various investment options and can be a powerful tool for long-term wealth building. Roth TSP contributions are made with after-tax dollars, but earnings and withdrawals in retirement are tax-free.

Research potential investment opportunities. However, be cautious and avoid making hasty decisions based on limited information or emotional impulses. Consult with a qualified financial advisor if needed.

Think about your post-deployment goals. Do you want to buy a house, go back to school, or start a business? Create a savings plan to help you achieve these objectives. The discipline and focus you develop during deployment will serve you well in achieving your financial aspirations back home.