Be an agent for change in your own financial life…

I said it once and I’ll say it again – financial literacy is of critical importance to one’s financial future. It’s hard to know if you’re in a tough financial bind if you’re not literate (or informed) on what good or bad financial habits are.

In line with financial literacy, we have to recognize that we have Agency.

Agency, in the context of an individual’s control over their life, refers to the capacity and ability of a person to make choices, take actions, and influence the direction of their own life. It encompasses the freedom to make decisions, set goals, and act upon them, which can be influenced by a person’s beliefs, values, skills, and the circumstances in which they find themselves. In essence, agency reflects a person’s sense of empowerment and self-determination in shaping their own life path.

So, how do we become better agents? How do we make the better choices day to day and execute our agency over our money? Do we want to increase our agency or our control over what we spend our money on? It boils down to goal setting and compromise.

Goal Setting

When was the last time you set a goal? When was the last time you came up with a plan, step by step, and then executed the necessary actions to accomplish said goal?

Take a few moments today, and write out (be it with pen and paper or with a Google Doc or Word document) and write out a financial goal. Feel free to write it in the following format – and know that the more specifics you can write down, the easier the execution will be:

I, want to (save, invest, learn about saving…) X many dollars, by X date (think in weeks, months or years) using my (primary income, side income, retirement income) WITH the intent of spending it on X.

This formula will provide you the minimum information necessary to affect change in your life and get you thinking about goals. It’s important to note, all of this saving or investing money means nothing without a greater reason (or goal) in mind. Next, we’ll talk about the Agency component (or how we’ll execute the above plan).

Agency – control your money

With your formula in mind, what can you currently optimize? You’re in control of your money, so where is it going and what can you cut back on? Is your goal to increase your current savings rate? Go to your banking app and put $50 into your savings account right now. Is your goal to increase your income to start earning more? Go apply to a new job with better pay. Looking to to learn more about real estate? Visit Bigger Pockets and learn about real estate investing… Remember, this is all to encourage action NOW. Taking control of the variables in the formulas and ACTING on them is what will lead to results. You were able to use the Internet to find this blog, you can use it again to make positive change towards your financial situation.

The next step, once you start taking action is to automate where your money goes. If you have stable income, as most military members do (1st and 15th pay dates never change), go ahead and go to your banking app of choice and set up an allotment. Allot X amount to automatically go to your savings or investment account – get ahead of yourself and save money before you even see it hit your account. For example, I have an allotment set up to move $850 per month into 3 different accounts (1. My TSP, 2. My Vanguard IRA, and 3. My Charles Schwab investment account). I don’t even have a choice in the matter – the first of every month I have that allotment kick in before my paycheck hits my main checking account.

The benefit of having this automatically occur is that I don’t have to worry or stress about if I have saved and invested enough for the year. It also forces me to live within my means because I don’t have access to those accounts to withdraw money which forces me to adjust to living on less money overall.

With setting goals and acting on them, I’m building a nest egg to retire on with, or without the aid of the military. Ultimately, I don’t want to rely on the military when I’m 40+ years of age. I’m being my own best agent, and paving the path towards financial freedom now, while my earned income is more valuable and while my expenses are relatively low (currently, no-mortgage, no children, no out of the ordinary expenses). Use the Agency that you have, do some research and continue to learn and act in your own best interest. Because after all, no one is coming to save you – so your financial future is really up to you and your ability to execute.

Want to read some more? Check out our friends over at MrMoneyMustache to and see what he has to say about becoming financially independent. See you in the next one!

-Michael, with Military.cash

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