Financial discipline refers to how well you are able to conform your spending and saving to the plans that you have set to achieve.
Many people have a norm with them to creating financial New Year’s resolutions. Well, if you didn’t, it’s never too late. We hardly half through the year.
One may want to go paper less, direct huge savings for retirement or gradually reduce on credit card balances this year.
It should be clear that making a resolution and achieving it are two different things. Usually, the habits you stick to are the ones that create room for you to bridge the gap and stick to your plans.
When you run out of the unwavering strength of will to stay financially disciplined and keeping those financial plans on track, you could consider the following;
Set a money objective
Financial goals help steer our behaviour. Most of us fail to create these goals because we see them as complicated. Some don’t even know what these goals should be in the first place. Others simply lack the motivation to go on planning because over the years, the financial goals created didn’t help as much.
This time round, we having a different approach all together. It’s a simplified approach by setting a money objective. It’s just but a short phrase that gives one direction to their entire financial life, thus it becomes a theme one rallys around. To be more effective, one can keep updating the money objective from year to year or just keep the same money objective for ages.
One could come up with a money objective depending on the insecurities one has. For instance, if one is worried on not saving enough money for retirement, then their money objective could be ‘future spendings’. Another could be ‘kids’schooling’ placed as financial mantra that is if your number 1 priority is paying for a child’s education.
We all should be clear about our objective as it makes your financial willpower more powerful. You don’t necessarily have to have a right or wrong priority. Pick something you feel empowered to and go after it with retaliation.
Adapt to using automation
You may want to save for a house down payment, emergency fund or beach vacation. All you have to do is to make it as convenient as possible so as to achieve your money objective.
Automation brings in more built-in discipline to your financial life and goals. It reduces on chances that you will forget your objective or even spending on things you don’t need.
Laura Adams says that if you have a retirement plan at work such as a 401(k), 403(b) or 457,always participate and contribute as much as possible. This is because these accounts are successful at getting workers to save. In that, contributions must be deducted from your paycheck before you even receive the cash.
Often, employers offer direct deposit for your paychecks. In that it allows it to be split into multiple accounts such as your checking and savings. Have a set up transfer that can automatically move funds from your checking into savings or any other type of accounts such as health savings account on regular basis.
Not having to think about savings takes the stress out of managing money. And sure enough, after awhile you probably won’t even miss the money.
Give yourself a Challenge
Laura Adams further states that if controlling one’s spending is a struggle, then they should know on how this is holding them back from achieving their money objective. Dealing away with unnecessary expenses is the key to living below your means .This means one has plenty of money left over each month to live their financial goals. Give yourself a challenge whereby you actively resist expenses that are most tempting. For example;
i) Do not buy new clothes for the next 90 days
ii) Unsubscribe from retail newsletters that offer sales you can’t resist
iii) Cook at home everyday for a month instead of eating out
iv) Avoid shopping as your way of entertainment
Change your environment
This means that to change on your habits, one has to try changing their environment. This could be a motivation you need thus a frequent reminder of your money objectives. Have what it takes to visibly trigger you to think about what you want to accomplish everyday. Cue up your home, workplace, car and any other strategic places you can’t avoid, places you visit frequently. In that, when these prompts get your attention, a fresh spark of inspiration is lit up.
One may write down their money objective using a felt pen on their debit and credit cards. Put it on sticky notes and place them either on your desk, bathroom mirror, refrigerator or even use it as a screen saver on your computer or mobile devices.
Write down on your journal entry as to why your money objective is significant and ways towards accomplishing it. With this written down, you could easily now monitor your progress. Any strategy that will keep your goals a priority will help you focus on what’s the most important and hence reinforce your commitments. Your money objective helps on guiding your behaviour but only if you remember it.
Working with a group or a partner may help you to spearhead your goals, it may not be as bad as you think. One could easily achieve their money objective tthough it. Have a close friend or spouse to help you stay accountable.
Both of you could be of great help to each other. This is because you are able to help him or her set and achieve a money goal. For this to be effective, pick out a time to check in with each other on a regular basis and even report your challenges and progress. This helps clear away barriers to success.
With financial progress being realized, a new wave is set into you. You start feeling excited about having money in the bank or even seeing your retirement account balance surge. Having self control and discipline to achieving your money objective gives you energy to overcome challenges and completely transform your financial life.
All in all, this is to say that financial discipline can be achieved through;
- Have a spending plan or budget-the budget must be inclusive and realistic with all possibilities included.
- Do not go expensive-most people suffer from financial myopia where they think cheap is expensive. Cut on that cost.
- Make a maximum contribution to life assets such as a mortgage plan, insurance plan or retirement scheme.
- Avoid unnecessary debt by not having a credit card or buying goods on hire purchase.
- Avoid quick money. There is no overnight success. No pain, no gain.
- Ensure you pay yourself. Always have some money set aside to pay your labour.
All you got to do is write your goal on a post-it note and stick it where you will see regularly. This will remind you of your financial resolutions. Manage your priorities, understand your spending, achieve your dreams. With these, you save more money.