Deployment Savings Opportunities

Using deployment financial opportunities to boost savings

Deployment and savings

• Making a budget is like deciding how to divide up the pie

• Deployment offers opportunities to make the pie larger

• Having more pie doesn’t mean you have to eat more pie

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Deployment and financial benefits

• Deployment offers allowances, tax breaks, incentives and special pay

• The Department of Defense currently has 70 types of special pays and allowances, depending on your deployment and duty status, branch of service, and duty station on the books

• Find detailed information through your service financial office or online through myPay

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What to save during deployment

• Combat zone tax exclusion• Pay yourself instead of the government– As an E-6 with 6 years, you earn approximately

$35,410 per year– The taxes generally add up to $8,800.00– Set aside $8,000 in a retirement account with

2% interest for 10 years – Saving earns you $1,769.60

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What to save during deployment

– Make extra payments on credit cards, student loans, car loans or mortgages.

• A credit card with a $15,000 balance will never be paid off with the minimum payment

• With a payment of $500/month, it will take nearly 3 years and over $2,000 in interest to pay off

• A lump sum payment of $8,000 towards this debt saves more than $1,500 in interest payments

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What to save during deployment

• Per diem while TDY– Minimize spending, maximize income

and saving• The difference that $5-$10/day can make…

– Over a week: $35-$70– Over a month: $140-$240– Over a year: $1820-$3640

• Small saving can be the difference between 1 cup of designer coffee per day and an HDTV– Paid in cash– No debt and no interest payments

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VS

What to save during deployment

• Family Separation Allowance– FSA is payable at

$250.00 per month and accrues from the day of departure from the home station and ends the day prior to arrival at the home station, in addition to any per diem or other entitlements

• Use this cash for taxes, retirement, credit card and loan payments, college savings, home repairs, etc

• Also consider using it for something that the whole family will enjoy for years

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What to save during deployment

• Maybe you are considering a family vacation after your deployment ends…and nothing says family like Mickey Mouse!

• 4 passes for 4 days in Disney World cost $1076

• If you pay in cash with your Family Separation Allowance Savings, you pay $1076

• If you put this on a credit card and only pay the minimum, you will pay more than $2,600 over 14 years

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What to save during deployment• Live alone?• Going to be gone for 3

months? 6 months? a year?• Consider renting out your

house or apartment for extra cash

• Subletting allows you to cover your housing costs while you still collect BAH

• Do you rent? – This is a great way to set

aside money for a down payment for your first home

• Do you own? – This is a great way to put

money aside for home improvements

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Ways to save during deployment

• Create a rainy day fund– Cash has its

advantages that credit and long-term accounts don’t offer

– Short term savings can really save you from the unexpected

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Ways to save during deployment

• See you local credit union or military bank to learn more about:– Basic Savings Accounts– Certificates of Deposit– College Savings Accounts– IRAs and other

retirement accounts– Investment options

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Ways to save during deployment

• Get sound advice.• Online, check out

saveandinvest.org for Money & Mobility, information specifically for military personnel and their families

• See a Personal Financial Manager at you Installation or arrange a consultation with a Certified Financial Planner through Military OneSource.

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Ways to save during deployment

• Financial assistance is also offered through:– Army Emergency

Relief– Navy-Marine

Corps Relief Society

– Air Force Aid Society

• These organizations offer a wide variety of services and assistance.

• More information, including contact information for the Relief Society nearest to you, each organization can be found online

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Ways to save during Deployment

• Saving Deposit Program (SDP)– For military members

deployed in combat zones, qualified hazardous duty areas, or certain contingency operations

– Annual interest rate of 10%

• E-6 salary after 6 years=$35,410• Save 10%=$3,451• After 12 months in SDP savings =

$3,809• Reward for saving = $358• Save the maximum = $10,000• After 12 months in SDP, savings =

$11,038• Reward for saving = $1,038

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Ways to save during deployment

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• TSP is a Federal Government-sponsored retirement savings and investment plan

• For more detailed information, visit http://www.tsp.gov

Join a community of savers

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