As the possibility of war with Iraq becomes an increasing reality, America’s troops and military reservists are preparing to leave loved ones behind - an unwelcome state of affairs with inevitable financial repercussions. Although the defense budget ballooned this year only a small portion of that is designated for troop pay. Reservists especially will face significant pay cuts as they leave their civilian jobs and return to active duty. These hardships can be eased with careful planning and good communication skills.
To help prepare our troops for possible deployment to the Persian Gulf and the Horn of Africa, Springboard Non-Profit Consumer Credit Management is distributing recommended tips for military reservists and active service members and their families.
* Cash Reserves: It’s a good idea to have six months worth of savings in the bank. Look at your budget, identify the necessities that you need to keep your household going and start putting away cash reserves in case of a household emergency. The last thing you want is to have a crisis at home while you’re fighting a crisis abroad!
* Credit Cards: The Sailors and Soldiers Act of 1940 is a tool for activated reserve members. It allows for activated military to have their interest rates lowered to 6% while they are on active status. Contact your creditors BEFORE you are activated to get the necessary paperwork ready once you are called up.
* Power of Attorney (temporary): Many people don’t know that you can make Power of Attorneys temporary and specific. For example, you can give Power of Attorney to your spouse or parents only for the duration of your activation and only for the purpose of managing and paying bills from your bank account. Contact your base Legal Resource office for details.
* Important Documents: Let loved ones know where your important papers are. This includes bank statements and insurance papers for car, health, home and life.
* List of Creditors: Make a list of contact information for your car, mortgage and credit card companies: phone and fax numbers, email and website information. If there’s a problem while you are away from home, a trusted family member will be able to handle it better with the right information at hand.
* Anticipate New Costs: Little things like long distance phone calls can add up. Most bases and ships provide phones for personal use but make sure you KNOW the rates before you call. If you have doubts, buy a pre-paid phone card or compare rates of different long distance carriers. Many ships are serviced by AT&T while the land bases vary. Many servicemen and women returned from the Gulf War with thousands of dollars in long distance charges.
* Review your Policies: If you use an insurance or loan company that services military families they may have additional services available to you if you are deployed or activated to your reserve unit. Call them and find out now.
* Use Technology: While you’re activated and out of touch, use email, direct deposit and Bill Pay to keep things moving forward.
* Taxes: If there is even a remote possibility that you will be deployed when tax time rolls around apply for an extension as soon as possible. Use Form 2350: Application for Extension of Time to File U.S. Income Tax Return. It can be downloaded at: www.irs.gov.
Springboard, a non-profit consumer credit management source and member of the National Foundation for Credit Counseling, offers assistance with money management and budgeting through confidential counseling, debt management and education programs for financially troubled consumers.