BEFORE YOU GO...
Get your finances and affairs in order with this checklist:
Banking & Debt
- Lower the interest rates on your debt. The law requires lenders to cap interest rates on your outstanding loans at 6 percent, among other things. But you must notify your lenders of your military status.
- Consider setting up automatic bill pay at your bank so you can pay your bills and manage accounts remotely. And consider setting up overdraft protection if you and your spouse will be writing checks from different locations.
- Military families that have sacrificed so much frequently face the added burden of having to move posts every 3 years or so. That means buying a home at each duty station and selling the home at your previous post. The government actually offers compensation for those who are forced to sell at a loss -- for up to 95% of that loss. However, this only applies to your primary residence purchased before July 1, 2006. Visit the Department of Defense's Homeowners' Assistance Program page for more details.
- The government can also underwrite the cost of buying a house up to 90% of the home's previous value under a separate provision of the law.
- Use free tax services such as the IRS Volunteer Income Tax Assistance Program, which offers free tax help at military bases. Also the IRS "Armed Forces Tax Guide," offers help preparing returns. Find it at IRS.gov.
- Find out if you qualify for the Earned Income Tax Credit, which allows you to exclude non-taxable income such as combat pay when filing.
- Review your life insurance policy. Make sure it doesn't contain a "war clause," which means your company won't cover deaths from war or combat. Most active duty members receive $250,000 of coverage from the Servicemembers' Group Life Insurance Program. If you don't already know about it, find out more at insurance.va.gov.
- You may want to put your car in storage while you're gone. If you do, call your insurer and ask about becoming a "non-operator," which could lower your payments.
Wills & Estate Planning
- Assign a power of attorney in your absence, and make sure you have a valid and updated will. You can revoke the power of attorney when you return, but it allows a relative or friend to handle financial decisions while you're gone. Find free information on estate planning and money management at USAAEDfoundation.org.
WHILE YOU'RE GONE...
You are protected in ways you may not know about:
- The Service Members' Civil Relief Act protects all active military families from foreclosures, evictions, and other financial consequences of military service. The Act also covers lapses in health and other insurance, default judgments in court cases, and limits on the amount of interest service men and women must pay.
- The new law allowing everyone to obtain one free credit report each year also allows military personnel to put "military fraud alerts" on their reports. Servicepeople must request them, but the alerts ensure that credit reporting companies are taking additional steps to verify a person's identity when applying for credit. The idea is to protect deployed persons from becoming victims of identity theft. The FTC has compiled a helpful guide that details the process of putting an active duty alert on your credit records.
- Active duty personnel can see their real true FICO score for free online by visiting SaveandInvest.org/military.
- MilitaryOneSource.com - DOD online and phone help 24 hours a day, 7 days a week - stateside and overseas. Call 1-800-342-9647 in the States or 1-800-3429-6477 overseas.
- Military.com - Comprehensive site offering information on benefits for military as well as news and information.
WHEN YOU COME BACK...
Help is available to you:
Start a Small Business
- Small business help is available for you. The Veterans Pledge Initiative can help with obtaining loans to start or expand small business. Potential lending to veterans may result in as much as $475 million in new funding over the next five years, which will be 5% above the existing lending baseline to veterans.
Enjoy a Discounted Vacation
- Military members have special ways to save on Disney vacations. ShadesofGreen.org is a special program offered for military personnel and families in partnership with Disney. Discounted lodging at parks starts at $95 a night. A similar service I've talked about in the past is Armed Forces Vacation Club.
Get Free Financial Advice
- The certified military counselors at ClearPoint ReConnect can help you create a family budget, start a debt management plan, become a homeowner, avoid foreclosure, or just get your finances in order. This service is free and confidential.
IF YOU ARE FRIEND OR FAMILY...
Let military men and women know that they are remembered and missed:
Donations & Gifts
- Hero Miles - Donate your frequent flier miles
- Military.com - Ways to send an e-mail to a servicemember
- USOMetroDC.org - Donate a care package
- CellphonesforSoldiers.com - Donate a cell phone
- ClarkHoward.com - Ways to send expired coupons to help the troops
- ClarkHoward.com - Join your State Defense Force