Monday, April 28, 2008

Military Family Finances: Surviving the Financial Stress of Deployment and Reunion

By Sarah J. Schmidt

With four years as a career military officer and a world of professional experience as an Army Family Team Master Builder, Amy Mangelsdorf never imagined she'd face difficulties when her husband deployed.

"I had attended every class the Army offers for deploying soldiers and their families. I had even taught some of the classes myself, so I had a pretty good idea of what to expect," she remembers. But she hadn't planned on juggling so many responsibilities and dealing with the stress of separation at the same time.

Experts say that's typical of the struggle military spouses undergo when a military member deploys. Family finances sit squarely in the middle of that struggle. In Amy's case, her husband managed the finances, although they both did planning. Shortly before deployment, he converted their checkbook to a new software program.

"That was a total mess," Amy recalls. "I tried a tutorial but didn't have time learn the software with everything else I was juggling."

To make matters worse, her two-year old became clingy and dependent. "For months, it seemed like I spent every waking moment of my son's life holding him, which didn't give me many opportunities to get other things like finances done," Amy says. The checkbook suffered.

"My husband nearly had a cow when he came home and realized I hadn't balanced the checkbook in four months," she admits. Because the Mangelsdorfs had planned well, they didn't experience any serious financial difficulties, but Amy says there were lots of pitfalls that she now tries to warn her friends about before deployment.

Financial Pitfalls of Deployment for the Military Family

"The number one issue deployed service members worry about is how they'll communicate during the deployment about finances, child care, family decisions, etc.," says Dr. Earl Beale, Director of the Family Support Center at Grand Forks Air Force Base in North Dakota.

To help ease those worries, the military provides free phone cards to deploying service members. In Grand Forks, as in many military communities, local businesses and citizens contribute additional phone cards to military families.

Many military installations also offer e-mail and video phones. "We have military family members who come in just to use the video phone to discuss a major purchase with their deployed spouse," Beale says. "Communicating about finances during the deployment solves a lot of problems down the road."

For Debbie West, whose husband deployed for Operation Enduring Freedom last spring, those phone calls are lifesavers. As part of an Army National Guard engineering battalion, her husband is too remote for e-mail. "The finance issue and the separation issue have just created overlapping stresses," she says, "but being able to talk through some of it with him has really helped. Getting his military pay straightened out was the most frustrating thing."

Deployed personnel serving in combat zones receive tax-free income. But the system is set up to withhold taxes as if it were ordinary pay, then refunds the withheld taxes a few weeks later. Debbie says none of the Guard families in her husband's unit received refunds at first. "It took a couple months to get those kinks worked out."

Extra Expenses May Offset Deployment Tax Breaks

That tax break on combat income was a real plus, says Kelly Campbell, whose Air Force husband deployed for five months during Operation Iraqi Freedom. With her part-time job and no children to support, the Campbells managed to keep their expenses "at about the same level during the deployment," Kelly says, "so the extra money we got back on the tax refund was a nice little windfall."

It's not that easy for others, however, warns Amy Mangelsdorf. "We thought we'd save all that money on taxes, but what we hadn't figured into the equation was the extra child care and travel costs I'd have," Amy recalls. She visited family and friends often, which cost more than she'd budgeted, and she incurred child care costs because her husband wasn't there to share parenting. A simple dental appointment, for example, now necessitated a babysitter since Daddy wasn't home to watch their son.

Navy spouse Kathy Radosta agrees. "There were months during the deployment when I probably spent close to $300 on child care, and I'm a stay-at-home mom!" she exclaims. The government helps out with affordable child care at Child Development Centers located on most military installations and free child care programs such as the Air Force's Give Parents A Break.

Still, these spouses warn military families to remain conscious of the extra expenses they're likely to incur and not to be fooled into thinking the tax refund will cover them. "You really have to be responsible about your spending," says Kathy.

"The smart thing, if you can afford it, is to put some of the savings away for when the deployed member returns," says Debbie West. She has opened a special savings account and tries to put at least some of the tax refund into it each month.

Deployment Reunion Planning

"Don't plan on any big expenditures that first month after he gets home," suggests Amy Mangelsdorf. She saw families fall into debt shortly after the deployed member returned because they "spent a lot of money trying to make up for lost time," she recalls. The worst financial times are the first two months of a deployment and the first two months after the deployed member gets home, because "that's when all the bills start pouring in," she warns.

"The good thing is that the family may actually have some money saved from the extra pay; but people tend to go out, buy a new car or something and end up with too much debt," says Bonnie Skinner, former Navy Ombudsman attached to the USS Lincoln.

The debt issue, coupled with the problem of deciding who now controls the checkbook, creates real complications, Bonnie says. "The spouse has been taking care of finances, and in comes the deployed member who now wants to take back control," she explains.

Air Force spouse Doreen McLean says this has been a big issue since her husband returned last spring from a six-month stay in the desert. "I'm still having a hard time letting him have the checkbook. It was hard for me to take it over, but now it's a struggle giving up the freedom."

Bonnie suggests couples again discuss who's going to perform which household roles. Doreen and her husband now pay the bills together: "We're still working on it, but talking over even the little purchases helps."

# # #

Deployment Financial Checklist for Military Families

  • Plan ahead.
  • Discuss what and when bills are due, where receipts are kept, etc.
  • Have enough saved.
  • Create a family budget.

Source: American Red Cross

Attorney Sarah J. Schmidt is a military spouse and the editor of a monthly legal newsletter, The Nonprofit Alert, published by the Virginia law firm Gammon & Grange, P.C.

Saturday, April 12, 2008

To Stay At Home, Or Not To Stay At Home... That Is The Question

Have you been confronted with the recession crisis yet? Have you noticed your interest rates on credit cards and unsecured loans shifting and moving upwards? Have you noticed the increase in fuel or the uprise in heating costs? I sure have!

Staying at home with my children was a decision my husband and I made once we reached Fort Bragg in April of 2006. I've always worked outside the home and being DINK's (dual income no kids) was a great life for a long time. Then having children changed our perspective. However watching our cost of living going higher and higher and looming rate hikes we decided its best for now if I do return to work.

It was a difficult decision and one we've struggled with for many months. Separating the main priorities from our desires was very emotionally draining. In the end, taking responsibility for our debt load, our home, our utilities and providing for my children took precedent over my desire to stay at home with them.

My father always tells me when you look behind you in your past decisions you laid every brick in that path. I want to make sure my path is the best for my family and myself. If your are in a similar situation try to maintain objectivity. Money is an unfortunate necessity in this day in age. You shouldn't feel guilty about providing for your family if you feel it is the only option open to you.

I've always resented the government or society dictating whether I should stay at home or work outside the home. Either choice is commendable.

If you are struggling with these same issues and would like to apply for government positions near your closest military station please utilize the following links. If you need assistance in applying and creating your resume please ask me.

God bless you and yours!

Cassie (mostly accounting positions)

It's What's On The Menu

Recently I received a tip from a family member about creating a functional and practical menu in order to save on money. I found not only am I saving money by utilizing this tool but I'm also helping to conserve energy by not standing in front of the fridge deciding on what to fix for dinner.

In order to simplify the "creation" of the menu I went to and looked under templates for Excel. I typed in "menu" and there are several templates you can work with. They will take some customizing but that's part of the fun. I also threw around the idea of using a dry-erase board to create my menus.

I found the average my own family spent at the store was $250.00 every two weeks. With a prepared menu and only listing exactly what is on the menu our grocery bill went to $180.00 every two weeks. The average savings per year for my family is $1,680.00!

I put all 7 days of the week across the top of the menu and on the left side I put Breakfast, Lunch, Dinner and then 3 snack choices a day. Have fun with your menu's and arrange them in any order that works best for you and your family.

If nothing else what do you have to lose by trying it out for yourself? You could end up saving yourself some big bucks in the long run. I found by utilizing a menu I am more likely to prepare a healthier meal for myself and my family. I don't over spend by purchasing lots of unnecessary canned goods or boxed goods. I put a copy of my menu on the front of my fridge for easy access.

Good luck with your menu's and your bottom line!

Buying An Automobile

When considering the costs associated with purchasing a new vehicle - insurance, maintenance, loan interest - don't forget to factor in depreciation. You won't find it on the sticker price, nor will you be billed for it. You may not even notice it until the time comes to sell your car. Still, depreciation can cost you big money over the years.In the first year you own a new car, the vehicle may lose 20 percent of its original value due to depreciation.

By the end of the fifth year, your vehicle's value drops by an average of 35 percent.It's not only vehicle buyers who pay the price. Depreciation also affects the cost of leasing as well because leasing payments are based in part on what a vehicle will be worth at lease-end.

The more a vehicle depreciates, the less value it will have at lease-end. So, you could lease a vehicle with the same sticker price as your neighbor's leased vehicle but pay a higher monthly lease payment if your vehicle depreciates at a faster rate.You can't stop depreciation, but you can lessen the impact it will have on your wallet. Here are a few points to consider:Some makes and models depreciate faster than others. Accurately predicting depreciation is difficult because so much depends on a vehicle's continuing popular appeal. But you can get a rough idea how much your vehicle will depreciate.

Consult a "blue book" or other pricing guides to find out how well previous years' models have held their valueThe pace of depreciation levels off after five years. Hanging on to a vehicle for at least that long minimizes the impact of depreciation on the overall cost of ownershipIt's smart to pick options that will appeal to the next buyer. Vehicles with air conditioning, automatic transmissions, sunroofs, and convertible tops tend to hold their resale value better. Lesser known models, "luxury" or "limited edition" models, and vehicles with odd colors or features tend to depreciate faster.

Vehicles that change dramatically in style from one year to the next tend to lose resale value faster. Last year's model quickly becomes outdated and loses its attraction to potential buyers. Choose a vehicle from a manufacturer that makes only subtle style changes each year.

Depreciation can deal a substantial financial blow to the owner of a new vehicle. But it can work to your advantage if you're in the market to buy or lease a used vehicle. A vehicle model that depreciates considerably in its early years may be an excellent deal as a used car.To-Do's Before Buying a Vehicle, automakers continue to woo would-be car buyers with generous rebates and low interest financing on many popular trucks and cars. Many local dealerships depend on redeploying troops to make their business successful. Generous as these incentives are, they should be used only after careful consideration of financial obligations and goals.If you're contemplating the idea of buying a new car, consider postponing your purchase until you're comfortable enough with your finances to save regularly in addition to paying your other bills on time. You may also want to give some serious consideration to buying a late-model used car. It will be just as reliable as a new car and will cost much less.

Information obtained from

God Bless,

Let's Clean Out Those Closets!

Let's Clean Out Those Closets!Would you like to put some extra cash in your pocket and clean out your closets at the same time? I'm going to tell you how that can be achieved without a stressful yard sale. First, go through your things and find out what you have that will fetch a sum. For example: anything with a tag on it that is new including shoes, nice office clothes, jeans and sweaters, children’s clothes that are clean without stains or tears, children’s shoes that are in like new condition.One of the ways to market your stuff is by a free site called There is no fee for posting ads on their site. People in your area can read your description of your items and then pay you in person.

Please avoid scams such as someone in Nigeria wants to buy your old laptop but wants your paypal account or bank account number in order to wire you money. This is an identity theft scam. Most replies will be from local people that are interested in purchasing your items for reasonable amounts.Another way, which is my favorite, is Ebay. It does cost to post your item, usually a negligible amount, but it's worth it! Every time my little one grows out of a size of clothes I make sure to put them in a "lot" on Ebay up for auction. I sold all of her clothes that way and made enough in return to buy her new clothes for her next size. It helps to sell clothes for the upcoming season. In other words, don't try to sell summer clothes in the fall. Sell summer clothes at the end of spring. Also try to sell your clothes in lots. For example women's size 10 jeans, 5 pair lot. Or baby girl size 24 months -2T winter lot. You keep your costs down and get rid of your stuff faster.Getting rid of your stuff can be financially beneficial and can also help de-clutter your home.

God Bless You and Yours! Cassie

Deployment - What To Do With The Extra Income

Once all the checklists are done and your soldier has packed up and shipped out the family dynamic has already begun to change. The "man of the house" has left for an extended stay in sunny Iraq (or elsewhere), and you are left in charge of everything. This can be a daunting experience and when faced with adversity from the media, co-workers, friends and even relatives the last thing on your mind is going to be your finances. Just waking up and getting through the day without having a panic attack every time the phone rings takes every ounce of energy and self-control. I've come up with some tips on what to do with that extra income your soldier earns, yes I said earns, while dodging bullets and camel spiders.Perhaps you already have these talking points incorporated into your budget...or perhaps you don't have a budget.First start out by preparing a budget and foreseeing any increase in pay while your husband is deployed. Such as hazard duty pay and or separation pay. Your spouse should be able to get the rough estimates, based on rank, of how much he will be earning while in a combat zone. Once you have some round numbers to plan with start out slowly and decide based on your outgoing bills how much extra is left over. If you follow Dave Ramsey's, author of Financial Peace, financial planning strategies you'll find the next step is to set aside emergency fund money. Dave Ramsey suggests saving for up to three months of expenditures. That includes house payment, food, gas etc. Once you have your emergency fund set aside move on to credit card debt. Dave Ramsey suggests start out with the smallest going to the largest. If you pay off the smaller one's you can start taking those monthly payments you would have made to the small cards and put them onto the larger ones. Then you can really start focusing on getting your credit card debt under control, if it isn't already. Take the opportunity to hammer away at your debt load while your soldier is deployed.For example; my husband deployed to Iraq in 2005 and was gone for a year. We paid off $25,000.00 in credit card debt between his extra income and my full time job. I also went to stay with his mother during this time so we wouldn't have a rental payment or mortgage payment and could put that much more towards our debt. It worked! No more student loans and no more credit card debt! Living debt free is an amazing feeling! The key though is not to backslide into the debt cycle again. Unfortunately for my husband and I, we went right back to our old habits as soon as he came home from his deployment. Some mistakes that are commonly made are buying cars or trucks once a soldier returns from a deployment. These high ticket high expense items are a money pit and a very poor investment. Your better off paying cash for a "new to you" used car or truck and pocketing the extra money or better yet putting it into savings for that trip to the islands! Time and again I've seen where a soldier returns home and buys a brand new vehicle only to turn around in a year or so and realize they can't afford the payment and or the gas and can't get rid of the vehicle without taking a huge loss. Vehicles are very poor investments, and as Dave Ramsey says "your vehicle should get you to point A and point B and that's it."In closing, take that extra income and use it wisely. You never know what tomorrow can bring. Budget, Save and pay off your Debt! Once you have been released from your shackles of debt you will know what its like to have the freedom to do anything and go anywhere and not ask your car payment for permission first.Keeping your money your own....

God Bless you and yours,Cassie Allen
Posted by Cassie Allen