Covering Your Financial Bases During a Military Deployment
When Jimmy Collins got the notice in December 2002 that he was going to be deployed overseas, his wife, Cara, said she was not ready.
Even though the Norwood resident had been in the Army reserves for some time, the couple had not set aside money for expenses while he was deployed.
“I wish we did, but we didn’t. I didn’t know what was going to happen,” said Cara, who at the time had a new entry-level job and relied on her husband to pay the bills. As a corrections officer at MCI-Concord, Jimmy made more money and handled the families’ finances. “I had to make the decisions at that point,” she said.
Thankfully for the Collins’, Jimmy’s Army position pays close to his civilian job, so Cara got a check on the 1st and 15th of each of the 20 months he was away. But many military families are not so lucky.
For three-quarters of Massachusetts’ National Guard soldiers, a deployment means taking a pay cut, said Tanya Rioux, supervisor of the Massachusetts National Guard’s Family Assistance Center in Taunton.
“It can really be a big shock for families, when all of a sudden they can’t pay bills,” Rioux said. “From the time that someone signs up, we tell them to be ready.”
Each National Guard unit has a Family Readiness Group which helps offer support on a number of matters, including finances. Group leaders do hand out information on how to prepare for deployment, but Rioux estimates that 75 percent of soldiers do not act on the information right away.
“A lot of people, until it’s a realistic and immediate problem, do not take advantage of it,” she said.
Unfortunately, in the case of finances, that reactionary attitude can be disastrous.
“The power of financial planning gains traction when it’s done in advance, when an individual or family has a plan and executes that plan,” Passacantando said.
That’s why a group of about 50 financial planners have volunteered their time to do pro bono advising for military families.
Each of the planners involved has been touched in some way by military service, whether they have friends or relatives in the armed forces, Passacantando said. The group volunteered their time when they realized the strain finances can have at deployment time.
“There’s a recognition that it can be challenging at a time when there’s a lot of emotional turmoil, a lot of uncertainty about the future,” he said. “We all wanted to do something to help.
The FPAMA group conducts seminars and one-on-one consultations with members of the military and their families to help with issues like budgeting, managing debt and estate planning. The organization also coordinates a telephone and email helpline for answering questions out of its Waltham headquarters.
Overall, the lessons stress the importance of an emergency fund, which Passacantando defined as the savings equivalent to three to six months worth of the household’s expenses. The money should be kept in a safe vehicle, like a bank or money market account, where it can earn interest and is easily accessible in case of an emergency.
Financial planners can also help soldiers understand a number of special protections the law affords during a deployment, under The Soldiers and Sailors Civil Relief Act of 1940 and the Uniformed Service Employment and Reemployment Rights Act of 1994. These laws ensure that members of the military can come back to the jobs they had pre-deployment and that they do not lose their homes while they are gone. Provisions in the laws protect families from eviction if the monthly rent does not exceed $2,400 a month, offer health care coverage for families during deployment and allow deployed soldiers to cancel lease agreements (including car leases) if they meet certain requirements. Deployed soldiers are also eligible for temporary stays of civil proceedings like bankruptcy, foreclosure, or divorce.
Federal law also requires lenders to cut interest rates on existing loans to military members to 6 percent during periods of active duty.
Cara Collins remembered having to do some legwork, like sending copies of her husband’s deployment papers to all of her credit card companies.
“But it’s definitely worth it,” she said. “Some cards are usually like 18 or 19 percent interest and it just grows.”
Passacantando said families also can not afford to let their financial guard down during deployment. Many use credit cards more often during deployment and many rack up hefty bills.
“It stops the bleeding temporarily but can overall exacerbate the financial situation,” he said.
Military families must also plan for the worst, filing wills, issuing powers of attorney, and choosing health care proxies, Passacantando said. Catherine Carney understands that.
Her husband, Jack, went to Iraq as a member of the 220th transportation company of the Army reserves in November. The couple thought they were prepared, since Jack was called up in 2003 and made all the necessary preparations before breaking his foot and staying behind when his unit shipped out.
But now, with Jack thousands of miles away, Catherine is fighting to probate a house Jack inherited recently. She has hired a lawyer to push the courts to accept the military power of attorney forms Jack signed.
“I’m trying to do everything so Jack isn’t stressed about things back home,” Catherine said. “He should be concentrating on fighting a war.”
The Carney’s are one example that even the best-laid plans can be derailed.
In those cases, the Guard’s Family Assistance Centers can help. Center staff network with a number of organizations and foundations that offer assistance for military families falling behind. Groups like the Salvation Army and the Friends of the Families of the National Guard and Reserve have some money available to help with things like rent, mortgage or utility payments.
Massachusetts communities have been generous in donations of things like overseas phone cards, which, while not considered a traditional financial burden, add up to an expense for military families. Some groups can even help with the cost of sending care packages to loved ones overseas.
The first thing to do, Rioux said, is to ask for help.
“There are so many resources,” she said. “But we’re not mind readers. All we need is for someone to say they need some help.”
Sarah MacDonald is a Massachusettsbased
freelance writer.
