Content provided courtesy of USAA.
For military families, deployments are a fact of life. Since predicting when or where you'll be called isn't possible, it pays to always be ready. This includes making sure your family is financially prepared to handle your absence.
Here are four tips for prepping your finances to withstand deployment.
Start by drafting a will and a durable power of attorney. Usually, you'll have an opportunity to update or create these documents during the pre-deployment phase.
Before proceeding, though, heed a note of caution: "It's important to realize that you're turning the keys to your finances over to the agent named in your power of attorney, so don't do it lightly," says J.J. Montanaro, a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA.
After taking care of your will and power of attorney, create a record of all your accounts. Make a copy to take with you and one to leave behind. Make sure your spouse is a joint account holder and has access to your finances, as he or she will need to keep the financial wheels turning while you're away. Any other people with power of attorney may need access to your accounts as well.
Next, notify creditors and other financial institutions about your deployment, and give them a way to contact you or your responsible party. Arrange to pay bills online from anywhere you have Internet access, and set up automatic payments for recurring expenses.
"The SCRA provides valuable protections for those who serve," points out Scott Halliwell, also a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA, "but if you don't know about those benefits, it'll be hard to take advantage of what's offered."
Under the SCRA, you may qualify for a lower interest rate on auto loans, credit cards and other debts. Plus, you may be able to delay civil legal actions, including bankruptcy, foreclosure and divorce.
Here are a few widely applicable components of the law:
"While it's essential to insure your belongings while you're away," Halliwell says, "you'll also want to make sure you don't waste money on coverage you won't need while you're deployed."
Consider the following:
Update your life insurance so your family remains on firm financial ground should the worst happen; this includes making any needed changes to your list of beneficiaries. This topic can be difficult to discuss, but providing your loved ones with financial security will help put your mind at ease.
Servicemembers' Group Life Insurance offers a maximum coverage of $400,000. This may be adequate for many families, though service members with higher incomes or multiple dependents may want additional coverage. SGLI also includes traumatic injury protection, which can help you and your family if you suffer a traumatic injury. Calculate your life insurance needs if you're unsure how much would be right for you.