Transition Tips 101: Financial Literacy Matters

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Financial literacy is a crucial and often overlooked life skill that many service leavers never get the chance to develop. It’s easy to see why – when you’re serving, your finances get taken care of for you. Food, rent, clothes, a steady income, you name it, the military covers it.

In many ways, making the leap to the civilian world means scrapping this structured lifestyle. It can be a shock to the system, especially if you’ve never had an opportunity (or the need) to manage your finances.  

It’s never too late to get financially savvy. First things first though – what is financial literacy? 

What is it? 

Investopedia defines financial literacy succinctly as ‘the ability to understand and make use of a variety of financial skills.’  

The European Commission define it as the ‘knowledge and skills needed to make important financial decisions.’ 

For example, this might be knowing which mortgage broker to choose, how to file taxes, how to budget, or even how to avoid going bankrupt. The quality of day-to-day life in the civilian world depends on a certain level of financial literacy, yet more than 25% of people lack the skills to make sound financial decisions (according to SME Today). 

If you’re hoping to make a smoother transition, it’s worth noting that there are some superb financial benefits for military personnel and veterans out there, and many of them will need a fairly strong grasp of finance to capitalise on. Two prime examples include: 

Military-specific mortgages – members of the armed forces tend to have very different credit histories compared to civilians, making it difficult to secure a mortgage from a standard lender. There are bespoke, military-focused mortgage lenders out there worth checking out if you’re hoping to invest in property. Check out these insights from HSBC for more info. 

Grants for Veterans – the UK has a range of schemes and initiatives aimed at supporting the financial well-being of veterans, including The Royal British Legion and the Armed Forces Covenant, both extremely valuable resources for members of the armed forces no matter what stage of their journey. 

Improving Your Financial Literacy

There’s more than a few ways you can enhance your financial literacy, but some of our favourites (tried-and-tested) include: 

Networking – the power of a strong network cannot be underestimated. From sharing knowledge to discovering new job opportunities and even making lifelong connections, networking is a vital part of the transition process. Reach out to your network for support on how to enhance your financial literacy. 

Listen to podcasts – podcasts are informal learning at its finest. There are some great shows out there to help you improve your finances, including the Money Clinic, Money 101, and Money Box.

Free Webinars – if you’re hoping to opt for a more interactive approach, it’s worth looking out for free corporate webinars. This can give you a chance to learn from the experts, meet fellow service leavers, and hopefully, learn more about how to manage your finances. The Ex-Military Careers team host regular webinars on LinkedIn: check us out here: https://www.linkedin.com/company/ex-military-careers

Start Budgeting – doing is often the best way to learn. Creating a budget sheet can help you get a head start on what’s what when it comes to your personal finances. You can download some examples from MoneySavingExpert.

Don’t worry if you can’t pick it up easily at first, finance can be painfully confusing at the best of times. The pay-off is huge though.

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