Financial readiness means understanding how to protect yourself from predatory practices and make confident, informed financial decisions. Here are some helpful steps to get you started:

1.      Start with Research

One of the best ways to protect your finances is to do your homework before making a purchase. Whether you’re shopping for a new car, applying for a loan, or making another major financial decision, take time to research your options.

Review your budget, understand what you can realistically afford, and learn about the businesses and lenders you’re considering. Are they military-friendly? Do they have a strong reputation for customer service? Have other consumers reported concerns or complaints? A little preparation can help you avoid costly mistakes and make decisions with confidence.

2.      Stay Vigilant

Service members and their families are often targeted by aggressive sales tactics and predatory financial practices. These may come from lenders, retailers, or even individuals who claim a military affiliation.

That is why it is important to stay vigilant. If someone is asking you to spend your hard-earned money, take the time to understand who they are and whether their offer is truly in your best interest. The more informed you are, the better equipped you will be to recognize red flags and avoid financial pitfalls.

3.      Know Your Rights and Resources

In addition to the consumer protections available to all Americans, service members and their dependents may be covered by laws such as the Military Lending Act (MLA) and the Servicemembers Civil Relief Act (SCRA).

You do not have to become an expert on consumer law, but it is important to know where to find reliable, unbiased information. Resources such as the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) offer valuable guidance on consumer rights, financial products, and common scams.

You also do not have to navigate financial decisions alone. Service members and their families have access to free, confidential support on the Department of Defense Financial Readiness (DoDFINRED) website. Counselors can assist with budgeting, credit management, and consumer education.

Additional assistance is available through Military OneSource and your installation’s legal assistance office.

Consumer Awareness Supports Financial Readiness

Being an informed consumer puts you in control. By researching before you buy, understanding your rights, and taking advantage of available resources, you can make confident financial decisions and better protect your financial future.

Make consumer awareness part of your financial readiness strategy. Taking a few extra steps before making a financial commitment can help ensure you are making decisions that support your goals, protect your finances, and safeguard the resources you have worked hard to earn.

The 24-hour news cycle keeps us informed of the imbalances and inequities experienced all over the world. This struggle never ceases, and we ponder what is within our reach of assistance and understanding. Educating oneself is a helpful way to make sense of the world and lessen anxiety around the unknown. Here is why managing your money should be at the top of your list when practicing self-care.

Financial Illiteracy Is Common

People often forgo financial self-care for other forms of self-care due to vast financial illiteracy. Individuals are often provided little financial education in their formative years, and unfortunately, our collective ignorance is often profitable for the financial industry. For example, the negative equity created when a young servicemember purchases their first car (a depreciating asset) at 22% interest, will take years to “right” itself through rolling negative equity into future car purchases and paying exorbitant interest amounts. This represents money that misses opportunities to grow through compound interest to one day support a comfortable retirement, a home renovation, or a two-week trip abroad. When making any large purchase, it can quite literally pay to educate yourself with financing options.

The Cost of Financial Illiteracy

Going to college does not guarantee a high-paying career anymore and many are living through the strain of years of crushing student loan debt that can extend into their elderly years. College debt, on a surface level, represents a missed investment opportunity. While the argument can be made that you are investing in your future and your career, it often still represents at least a decade of money not being invested on that person’s behalf. That is not to say that investing in a higher education is not a smart career move, it is just something that you should educate yourself on to make an informed decision before potentially committing to decades of debt.

Our finances are a symptom and not a cause or effect. The effects of financial illiteracy are crushing debt loads, insolvency, and stress, which can result in ensuing health challenges.

Getting Started on Your Path to Financial Literacy

As a Personal Financial Counselor (PFC) providing financial counseling and advice to military families for more than 15 years, I have provided guidance to hundreds  of individuals to achieve their financial goals and maintain their financial well-being. This often involves completing a thorough spending plan which includes budgeting for items such as supplementing income, eating out, supporting lifestyle habits, entertainment, and even leaving room for the occasional indulgence (manicures/pedicures). You can do this yourself by:

1. Make a list of essential expenses—food, housing, childcare, etc. This will provide great insight into your values and help you prioritize what is non-negotiable.
2. Start small—be mindful that change takes time. Identify 1-2 items that you are willing to cut out of your spending habits by consolidating the non-essentials. Make a note of the impact on your savings. Then adjust more the following month. Change that is too much too fast can negatively impact long-term success.
3. Stay motivated—remember that financial wellness is a part of your overall self-care. Understand that staying interested in and educating yourself on your finances is a long-term investment in your personal (and family’s) well-being.

Free Financial Resources for Military Service Members

If you are a military Service member, you are in luck. You have access to Personal Financial Counselors (PFC) and Military and Family Life Counselors (MFLCs) who can help you get started on your path to financial wellness today. The Financial Readiness PFC Locator Map can assist with finding the financial counselor nearest you in both CONUS and OCONUS locations. Visit Military OneSource to find an MFLC near you.