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The following article is a guest post from Neal Frankle. He's the owner of Wealth Pilgrim and also writes for Business Insider. He's also been a Certified Financial Planner for over 30 years and offers lots of financial wisdom, some of it counter-intuitive, on his many websites.
When you have a job to do as important as protecting the United States of America, the last thing you need to worry about is finances. Sadly, many deployed military have no choice. On top of the burden of leaving family and loved ones behind, they have to carry with them the gut-wrenching worry about money as they deploy.
The good news is it doesn’t have to be that way. Here are the top seven financial worries deployed military deal with and what to do about them.
1. Get All The Bills Paid
This is job #1. When you are 10,000 miles and 15 time zones away from home, you don’t need to deal with delinquent bills or nasty debt collectors. The easiest way to make sure you and your family don’t face this problem is to automate your bill payments.
This simply means that you authorize your creditors to withdraw funds from your checking account each month as your bills come due. This includes your mortgage, insurance, utilities, car payment etc. To do this, contact each creditor and tell them what you want to do. They’ll get you set up in no time for free.
And don’t worry about being ripped off. You’ll still get a copy of your monthly bills so you can make sure all the automatic payments are on the up and up. Once you get all your bills set up on autopay, you’ll never have to worry about late fees or service cut offs again.
2. Online Access
While we are on the subject of putting your bills on automatic, make sure to get set up to have online access to all your accounts and that your vendors know how to contact you via email. Again, this is easy to do and free.
Sometimes your creditors make minor errors but if you don’t bring it to their attention, they can fester and mushroom into bigger problems for you and your family. By taking this step, you’ll be able to spot and then nip any problems in the bud fast and save the headaches.
3. Budgeting and Spending
The best time to set up your budget is while you are at home of course but you do the best you can. Never-the-less, budgeting isn’t all that tough even by remote. If you have online access to your accounts (step 2 above) you’ll be able to watch every penny that goes in and out of your account no matter where you are.
The bigger issue is knowing how much you really should be spending in the first place. In order to know that you should run a financial plan. The good news, this is something you can also do yourself for free and you can do it from afar.
Get a sense of what you spend on average each month and compare it to your income. Simple. You can easily see what you spend on average by looking over your bank statements. They summarize your total withdrawals for each month. If your average spending is less than your income you don’t have a problem. If your average spending exceeds your income, go through those bank and credit card statements with your spouse and determine where to cut. The last thing you need right now is to worry about running up bills you can’t pay. You have enough on your mind.
4. Identifying Your Backup
For most of us, our spouse is our backup. Make sure he or she has access to all your accounts and that includes passwords soldier.
While we are on the topic of backup, it’s a good idea to have some emergency cash in the bank just in case. If things are tight, talk to your family or friends and see if they would be willing to step up should something come up. If that doesn’t work, you might consider contacting a peer-to-peer lending company to get something organized just in case.
What you don’t want to do is ignore having adequate reserves or reserve sources on deck. People who skip this step often end up on the door steps of payday loan companies and get raked over the coals with sky-high charges and fees. Don’t let this happen to you.
5. Have The Right Beneficiaries
Even if you do everything else right, everything can go wrong if you don’t check your beneficiaries once in a while. You’d be amazed how many times banks, brokers and insurance companies lose beneficiary information. That’s why it’s important to have the correct beneficiaries’ names and to make sure you have documentation to prove it.
To get this done, just ask your financial institution for a copy of the beneficiary designation forms and confirm that things are set up the way you want them to be. If there are no beneficiaries named, please take care of that pronto.
We talked about online access earlier and that’s important. But it’s just as important to make sure your spouse and family know where all your important documents are and how to access any information you might need while you are deployed.
Create a folder with all your most recent account statements and make sure your loved ones know where this file is. Play it safe and leave notes if appropriate for any specifics you think might be helpful.
As part of the Servicemember’s Group Life Insurance program (SGLI) you can get a traumatic injury policy. If you qualify and go on active duty in a combat zone, it’s dirt cheap ($1 a month) and payouts range from $25,000 to $100,000 depending on the injury involved.
This doesn’t cover everything. Read the fine print and make sure it’s a good fit. Also, make sure you have other coverage, like disability, for those damages that this policy doesn’t cover.
If you noticed, these top 7 concerns are pretty important issues but fairly easy to address. Sadly, these are things that many in the military overlook even when they are at home. Don’t fall into that trap. Take a little time to make sure you handle each concern. Once you get started, you’ll find that they are pretty easy to deal with. And once you get this done, you and your family will feel much better.
What other financial concerns do you have when you deploy?