Let’s face it, separation is never easy. There are so many things to juggle and take care of while the service member is away on military duty, like deciding how to handle the budget from two separate locations. This can be especially tricky when that service member is in the National Guard or Reserves and periods of separation are not as common. Or, they happen frequently and cause regular disruptions in a variety of areas of life, like your civilian job. The key is to always be ready for the unexpected changes to everyday life, including finances.
Frequent or unexpected separations can make it challenging to stay on track towards financial goals. This is why it is so important for couples to work together to make sure the budget and money don’t fly out the window just because the service member is away on a mission.
Here are some important things to consider for establishing and maintaining financial goals in your military household:
Create a solid budget prior to the separation. Every dollar of income needs to have an assignment. There are even apps available that allow both of you to view the budget from your mobile device and always be on the same page.
One budget buster is the amount of money the military member might spend while away on the mission. To solve this, set a dollar amount as part of the budget that he or she is allowed to spend. It might be helpful to simply pull this amount out in cash every month and that is all the money the he or she has available for the set period. The same could be said for the discretionary spending for the spouse and family back home as well.
TIP: An envelope system is a great way to budget everyday spending.
Set financial goals together! This is very important. Even though separations are stressful, it can also net some extra income, which should be allocated for ahead of time. For example, separation pay should have an intended purpose, like TSP contributions, to provide child care, lawn maintenance, debt reduction, etc. In some cases this money is viewed as extra and is used for frivolous purposes and then when there is a genuine need for the money, it is no longer available.
SIDE NOTE: In some cases, the military mission or assignment can cause financial hardship versus gain because the service member earns less income while away on the mission. This needs to be planned for and it is important to have plenty of savings on hand to cover the gap in income, so that the family is still taken care or that progress can still be made towards financial goals. A drop in income is not an excuse to go into debt. Be prepared and if necessary make changes to the budget to accommodate for the drop in income.
Decide how financial decisions are going to be made while separated. Communication can be limited and as a couple you may not always be able to discuss financial decisions. There needs to be a plan in place to handle these occurrences. For example, how much is one person allowed to spend on an emergency without discussing it first?
A big issue during separation is emotional spending. This can derail your progress towards financial goals. If this is an issue, please discuss with someone before going on a shopping spree to make yourself feel better. A lot of poor financial decisions are made during deployments and these decisions stay with you for a long time.
If the separation involves an overseas mission to a hazard duty zone, don’t forget to take advantage of all the savings programs and the tax free investments that can be made while away. If you are fortunate enough to build up a substantial nest egg, create a plan for that money when you return, otherwise before you know it, all the money has been spent Take the negative out of the separation looking at the possibilities, such as getting financially healthy.
If you would like more help with your finances contact Military One Source or reach out to your local Personal Financial Counselor assigned to your unit or base. Their services are free of charge for all service members and their spouses.Read comments