Financial discipline refers to your ability to conform your spending and saving to the plans that you have set to achieve your monetary goals. If you don’t have a financial plan in place, it’s really hard to be disciplined about how you spend your money because you haven’t created any guidelines for yourself to follow.
The primary reason for financial problems in life is lack of self-discipline, self-mastery, and self-control. It is the inability to delay gratification in the short term. It is the tendency for people to spend everything they earn and a little more besides, usually supplemented by loans and credit card debt.
Use Self Discipline to Rewire Your Responses about Money
The starting point of achieving financial independence is to for you use self-discipline to rewire your attitude towards money. You reach into your subconscious mind and disconnect the wire linking “spending” and “happiness.” You then reconnect that “happiness” wire to the “saving and investing” wire.
To reinforce this shift in thinking, and eliminate financial problems open up a “financial freedom account” at your local bank. This is the account in which you deposit money for the long term. Once your money goes into this account, you resolve that you will never spend it on anything except to achieve financial freedom.
9 Tips for Creating Discipline With Money
3. Understand Money
It’s imperative to understand money if you want to have financial discipline. Read books, blogs, and take courses about personal finance, getting out of debt, investing, etc. so you’ll know what financial habits you need to establish. You don’t have to know everything about money, just learning the basics and sticking to them is 80% of the battle. You are not meant to work for money, money is meant to work for you. Do not become a slave of money.
2. Pay Yourself First
Saving money can be a hard habit to establish when you have a lot of financial obligations. Most of us pay bills first, then try to figure out how to save money out of what’s left. The best thing you can do is to automatically pay yourself first (after paying your tithe if you are a Christian, of course).
Paying yourself first means you should figure out a percentage of your paycheck that you want to put into savings, then have it automatically drafted from your paycheck every time you get paid. This creates the discipline of consistently putting money into savings because you don’t have to think about it every time you get paid. It’s automatically done for you so you don’t have to agonize over that decision every time payday comes.
If the automatic payment method does not work for you, you can try transferring part of your income (Salary or profit) out of your account to a designated one as soon as you get credited.
3. Make a Plan
Making a plan for spending your money on paper before you actually spend it is very important for building discipline with money. When I say “make a plan”, what I really mean is that you should make a written monthly budget. Using a budget is not about deprivation like many people believe when they think of budgeting. A budget is simply a plan for how you’ll spend your money going forward.
Your budget should not deprive you of necessities as this is not feasible and you will be unable to follow through. You need to include certain important components in your budget after taking cognisance of your spending habit.
3. Practice Mindful Spending
In today’s modern society where we see and hear over 3,000 marketing messages every day, it’s easy to spend money without even thinking about it. You can empty your account from sitting at a particular position. You do not have to leave the comfort of your home to make expenses anymore. Learn to start asking yourself questions before you spend money, such as:
- Do I really need this?
- Is this what I came to the store to get?
- Can I do without it?
- Am I buying this out of emotion, just to feel good?
- Can I really afford this?
The more mindful you are when you take money out of that envelope to spend it or use your debit card to make payments, the more you realize that there are a lot of things you don’t necessarily need, you’ll be just as happy without them.
4. Building Financial Discipline is Like Building Muscle
It’s not always easy to build discipline in any area of your life, but when you make the effort, the rewards are definitely worth it! Creating financial discipline is a lot like building muscle. You start slowly at first and add more weight over time as you build strength. Eventually, you create the strong, toned muscles you always wanted. It takes a lot of discipline for expansion of muscles to occur. Often times you need to be intentional for muscles to build up.
Just like building muscle, you probably shouldn’t try to do all these tips recommended at once. Start with one, integrate it into your life, then start another until they all become second nature.
Learning Financial Discipline Helps Other Areas of Your Life Too!
The cool thing about building financial discipline is that it spills over into other areas of your life. Anytime you work on being disciplined in one area, such as money, you tend to apply those principles to other areas as well, creating a more disciplined life overall.
Discipline is fundamental for financial growth. It ultimately boils down to your choices. The choices you make will determine if you achieve financial freedom or not. Discipline is fundamental for financial growth. It ultimately boils down to your choices. The choices you make will determine if you achieve financial freedom or not. Just as “Tiny drops of water make a mighty ocean” so will everyday choices determine the end result in every area of your life.
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