Sometimes budgeting on military pay reminds me of trying to work with an income based on commission: You work the numbers the best you can based on the minimum you expect to come in; but you’re really hoping some extra checks for some other jobs come through as well.
At the beginning of February, I wrote out a budget based on January’s pay. Even though we were expecting extra pay for The Hubs’ deployment, I knew that none of those bonuses would hit his paycheck until the month after he left, at the earliest.
Re-Cap: Anticipated Deployment Income
- Family Separation Allowance (FSA): $250/month
- Hazardous Duty Pay (HDP) $100/month
- Foreign Language Proficiency Pay (FLPP) (referred to as FLIP): $200?
Actual (So Far)
- Hostile Fire Pay (HFP/IDP): $225
- No Federal Taxes!: $480.20
Hmmm… Nothing’s quite matching up, is it?
No Taxes While Deployed Overseas
I was not anticipating that taxes would not be taken out of his paychecks while he’s deployed. No, troops do not pay taxes while they are deployed overseas! but I thought that was credited retroactively. In fact, I was so surprised (in a very good way!) that I dug up his LES’s from his last deployment to look-see if I just wasn’t remembering correctly…
No-sirree. Last time we paid taxes the whole time he was deployed. A lot of financial things were messed up with that last deployment, as I recall. Now, the amount of his paycheck had always fluctuated month-to-month because we were overseas where we received a living allowance based on the exchange rate — which, of course, fluctuated. I had a vague notion that his pay should probably be more than it was while he was gone, but I did not have ready access to his LES’s and I was a bit more consumed with my babies and just taking care of my family in an overseas’ environment thank-you-very-much.
In other words, we had no financial plan.
How The Military’s Mi$take Helped Us
What the military’s mistake did do for us was for us was enforce a sort of savings plan (albeit one that didn’t earn interest). Once The Hubs got back and sorted out all the bonus pay he never received, we had a nice little pile of cash we used for our moving expenses back to the States as well as a (tiny) down payment on our home here in Ohio. I honestly don’t think I would have put aside all of that money those months he was gone had it been entirely up to me. Oh, I wouldn’t have felt like I was spending money frivolously! I simply didn’t practice intentional, mindful spending on a daily basis. Nor did we even discuss saving up for the next move’s expenses, like that might be a good idea or something. We had no plan. You might say that time was BWMDR: Before We Met Dave Ramsey.
This Time: We Have A Plan
It seems fitting that we will be able to put these financial perks to use right away, now that we have a Plan with what we’re doing with our money rather than just paying the bills and sort of flitting around from there to here and hoping it all turns out okay once the dust settles.
Another One Down
I sent off the last payment today for the debt we owed on our family van. That. felt. good.
But I’m already looking ahead to the next step, which will be to make a ROTH contribution for 2009 before April; we are likely waiting until The Hubs returns to file our taxes anyway. Then we’ll bulk up our emergency savings and charge into our second mortgage…
I’m actually excited.
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{ 7 comments… read them below or add one }
Our special pay is just kicking in this paycheck and I’m trying really hard to not put it in the budget and just shove it into savings without thinking about it.
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Here’s a few things extra that you can add to your budget:
-Your husband’s SGLI will be free during this time, so if you pay monthly for this, it will be refunded back to you.
-Per diem pay, the amount will differ depending on where he is. He can choose to get that now or later.
The extra pay and the no tax benefit is probably the only good thing about deployment. I know it must feel great to have that van paid off!
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I don’t know how you budget, not knowing what comes in each month! I really admire you!
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Thank you for the sacrifices you and your husband ( and the rest of the military soldiers and families) make for our freedom. You are in our prayers. I wish it was reflected in the paychecks! Nonetheless, your progress is great – keep it up!
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Can’t help but notice….$100 a month for hazardous duty pay….ONLY? Seems like a small amount for putting our guys in danger. Thank you for the sacrifices you and your family are making for our freedom. And congrats on getting the van paid off…you will LOVE not having a car payment! Good on ya!
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jolyn Reply:
February 23rd, 2010 at 8:59 am
Jackie,
I don’t know if “hazardous duty pay” has now become the “Hostile Fire Pay” that you see above, or if HDP is still coming, but the actual amount (so far) is $225 a month. That’s not based on rank, either, so the “lowliest” grunt soldier gets the same HFP as his commanding officer. For the lower enlisted, that is a significant pay increase! (I know – we were there once!)
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You should be excited! What great news that you’ve paid off another debt!
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jolyn Reply:
February 23rd, 2010 at 9:01 am
Oh, Jaime, I am, I am…. I’m also excited about getting started on the next one! Even though our 2nd mortgage alone is more than all of the consumer debt combined that we just paid off, it’s amazing how accomplishing that payoff gives you confidence to tackle the next hurdle!
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Hi, I just gave you an award – hope you get a moment to swing by my blog and pick it up
– Jane xx
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