Military service presents distinct financial challenges. Here's how families can get ready before boot camp starts.
My son's decision to join the military was anticipated, given his father's honorable service in the Air Force, with multiple deployments before and after 9/11. He preferred action over classroom time, making a military career a natural fit.
While we eagerly anticipated his Army training, we understood the need for financial readiness. Unless you've lived this experience, it's hard to grasp the demands. You might worry about safety, training, or potential deployments but may overlook the financial responsibilities involved. Fortunately, we drew from my husband's military past and my financial expertise to navigate this.
New recruits have limited access to phones and laptops. They're often required to store their devices for most of the week. Initially, our son could only use his phone briefly on Sundays. As his training progressed, he gained more privileges, but his attention was on family, not managing finances.
This communication gap meant we needed to oversee his finances temporarily. Many families are unprepared for this reality, and the military offers little guidance. Whether supporting a child entering service or a spouse being deployed, here's how to prepare.
Allow Sufficient Time
Your loved one's primary focus will be their service, not managing bills or bank accounts.
We started by obtaining powers of attorney for financial and health decisions, enabling us to act on our son's behalf. This is advisable even if your child isn't joining the military. At 18, you lose the authority to make decisions for them, which could be crucial in emergencies.
Next, we reviewed his recurring expenses to identify services he wouldn't need during his absence. I suggest doing this 60 days before departure and again 30 days prior to capture any unusual charges. We canceled his Xbox, Spotify, and gym memberships, but kept his auto insurance active for when he finishes boot camp.
For married couples, joint accounts facilitate uninterrupted bill payments. However, many new service members may not have set up joint accounts yet. In such cases, powers of attorney and online access allow loved ones to manage payments.
Ensure you have all necessary online credentials. We updated two-factor authentication settings to send verification codes to email instead of his phone, which would be stored away. Without this adjustment, we risked being locked out of his accounts.
Know Military Benefits
Military service offers various benefits, which can be complicated to comprehend. Discuss these with your loved one to ensure they understand their entitlements upon arriving at base.
The GI Bill, for instance, was a significant factor in our son's decision to enlist. The military covers in-state tuition and fees for public colleges and up to $28,937 annually for private institutions after three years of service. It's crucial they opt in at the start of their service.
Another benefit is the Thrift Savings Plan, which auto-enrolls service members at 5% of their salary, matching contributions up to 5%. If your child has no significant expenses, encourage them to contribute more. Our son is currently contributing more, but plans to adjust as his expenses increase.
Active duty members also have access to the government's health insurance plan, known as TRICARE. While enrolling as a service member is straightforward, spouses and dependents must take further steps.
Pay Schedule Awareness
Many families are surprised by how military pay operates. The initial paycheck often arrives about a month after service begins, so it's essential to have enough savings to cover expenses during this period. I've seen spouses express concern over meeting rent during this gap.
Upon arriving at boot camp, recruits usually receive a small advance on a debit card for essentials like toiletries, which will be deducted from their first paycheck.
Prepare for Tax Season
Military members must still file taxes, and training schedules often conflict with tax deadlines. I had to file my son's taxes for him. Without preparation, families can find themselves scrambling during tax time, risking penalties.
If your service member is unavailable during tax season, ensure you can access necessary documents like W-2s or 1099s, or be ready to file for an extension. Keep in mind that extensions only change the filing deadline, not the payment deadline.
Establish a Post-Bootcamp Foundation
As my son approaches graduation from training and begins his Army career, he's building a solid financial foundation. Soon, he'll receive a housing allowance, regain access to his car, and manage his meals. My focus will shift toward supporting his independence rather than overseeing all his financial matters.
For single service members, I recommend maintaining powers of attorney even after training. Military life can be unpredictable, with deployments or transfers happening suddenly. My husband, for instance, received deployment orders and left within 48 hours, leaving many responsibilities unfinished.
Be Ready for the Long Term
The transition to military life is a significant adjustment for everyone involved. By preparing financially in advance, you can lay a foundation that supports your loved one's service while minimizing stress.
Seeing your loved one thrive in their service will be even more rewarding when you know they can focus on their mission without financial concerns.
