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

By Sarah J. Schmidt
http://www.militarymoney.com/home/1068225878

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."

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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

http://www.militarymoney.com/home/1068225878

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.