Financial discipline can at times seem elusive. You might have tried different tactics, adopted different resolutions, spending a considerable amount of effort only to go nowhere. It is quite understandable if you feel tired of trying to become more financially disciplined.
But take a moment to review the rewards of working to improve your financial discipline. You can clear off all of your credit obligations, have more money to spend on worthwhile ventures, and build up your savings and investments for the future. There’s no age limit – upper or lower – to financial discipline so it is time to take up the challenge, even if you have tried before. Willpower is not often enough to drive you towards financial discipline. Here are a few creative steps to get you there.
Financial Goals / Personal Money Objectives
Setting financial goals is often touted as a means to improving your financial behavior. And that is important. Having a personal financial goal or target helps you keep your money on the right path. If you have set financial goals in the past that did not come to fruition, or you think financial goals are a tad too complicated for you, or you are not quite sure what should be your goal, you can look into a simple money objective.
A personal money objective is a simple phrase or word that guides your spending habit, giving you a theme to rally around on the spending front. If, for instance, you need to control your spending, a catch phrase like “careful spending” could do the trick. Whatever the case, get creative with a simple and easy to remember phrase that accentuates your true objective.
Pay Your Future Self First
There is no better way to emphasize the importance of savings. You might have set short or long term targets w=you hope to achieve financially but find it difficult achieving these targets. For many, this is because you first pay your bills before trying to figure out how to save. This creates inconsistencies in your savings, many times forcing you to skip your monthly saving targets.
Why not pay your future self first? Interestingly, this is rather easy. Figure out a percentage of your earnings you want to save. Now get it automatically drafted from your paycheck well before it gets to you. Already have a savings account? Why not arrange for a retirement savings account such as a 401(k), 457, or 403(b)? You can also set up automatic transfers into other types of savings accounts on a regular basis.
Document Your Spending
If you find your spending going out of control, one positive step towards curbing frivolous spending is to document your spending. Documenting your spending has two major facets.
The first is organizing a budget. This might seem on the surface like a really tedious task, but it isn’t. When planning a budget, your one real concern should be what you can do without. Organize your spending into categories like rent and utilities, taxes, insurance, medicals, vehicle… With necessities figured out, you want to move over to your financial targets and figure out how to achieve them.
The next phase in documenting your spending is getting a journal to document how you spend money. Write down every purchase and take note of every amount spent on entertainment, shopping and recreation. Mid way through the month, compare your budget with your spending journal to see if you are still on track.
Ditch The Credit Cards
One of the biggest challenges to a more disciplined spending habit is your credit card. While you keep working to get out of debt, persisting with your credit cards keeps you in a perpetual cycle of debt. Even worse, it allows you to keep spending regularly beyond your means without feeling any immediate repercussions.
Put away the credit cards so they are no more available as a possible spending option, or as a temptation for reckless spending. Don’t trust yourself to simply keep them away? Cut your credit cards up for good. Remember, you cannot keep up with all of the night time ice cream and ham while expecting your waistline to become smaller.
Refine Your Everyday Practices
It’s hard to keep track of expenses when seemingly “minor” expenses cloud your spending. Little things like picking up coffee from the coffee shop, seeing every new movie at the cinema, and eating out every night can add up to a whole lot over time. Refine your everyday practices by cutting down on some of these.
Why not make more of your coffee at home rather than buy one for a few bucks? How about you get to know your kitchen a little more and try cooking at least one meal every day – rather than going the restaurant or fast food route? Perhaps you can try seeing a movie at matinee rather than full price. These little things can save you a whole lot in the long run.
This is a very important part of becoming financially disciplined. Continuously working yourself off to improve your finances can become tiresome and boring. Eventually you might be forced to enjoy some unplanned fun and skid off from there. Establishing a reward system for every accomplished goal and target helps ease you off. Let your brain be aware that every hard work has a commensurate reward. As you look forward to these rewards, you’ll be more inclined to keep going for your next target.
Building financial discipline has been likened to building your muscle. It would hurt. Especially when you just start off. There would be times when you just want to quit and return to your regular life. But if you start slow, allowing yourself acclimatize over time, and gradually take on more weight, you’ll find that you can keep pace. The rewards of financial discipline outweigh the effort involved. In time you will find that the effort has been worth it.