Learning discipline with money is not always easy, but it’s necessary if you want to get ahead financially. Many people tell me they don’t make enough money, but here’s the deal- If you have lack of financial discipline, you will always struggle with money whether you make N100,000 a year or N10 million a year. It’s not the money, it’s what you do with it that counts.
Why you need discipline to succeed
Discipline is not one of those sexy words or concepts that most of us enjoy talking about. In our culture, we’re encouraged to “have it now!” with easy monthly payments, but that kind of thinking is what keeps you stressed, depressed and enslaved to your debt.
That mentality cultivates a cycle of living paycheck to paycheck and payment to payment that never ends unless you develop the discipline to escape that life and be different.
Anyone can develop financial discipline, it just takes a willingness to change and develop new habits. When you do, your finances will take a turn for the better– you’ll have more money, save more money and build more financial security for you and your family.
Here are tips that help you create discipline with 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 per cent of the battle.
I believe the best first step to changing your financial life is to get mad. You have to get so mad at your situation that you have to do something about it, no matter what stands in your way. Getting your emotions involved helps keep you engaged in the process.
Getting naked simply means this- stop using credit, period. One of the biggest problems I see with people who try, and fail, to change their financial situation, is that they keep using credit while they’re trying to get out of debt. That’s kind of like eating a big bowl of ice cream every night before bed and wondering why your jeans keep getting tighter.
Swearing off credit cards and other forms of consumer debt keeps you from digging the debt hole any deeper. When you cut up the cards, they are no longer available as a temptation or even an option for spending. This forces you to find better ways to finance your life that won’t get you into debt.
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, 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 agonise over that decision every time payday comes.
Keep moving forward
Anytime you’re trying to do something new, especially if you’re learning to be more disciplined, there will be setbacks. Don’t let the setbacks get you down. Just accept that it happened, deal with it and keep moving forward. Nobody has ever accomplished anything good without overcoming a few trials along the way.
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.
A solid budget works best when you combine it with an envelope system (see below) and going naked with credit. I’ve discovered that the reason that many people fail at budgeting is because they don’t include those important components along with their budget.
Start an envelope system
Starting an envelope system for your monthly spending is a great way to create financial discipline because it ensures that you never spend more than you make. When you get paid and distribute all your spending money into envelopes, you spend only what’s in the envelopes and no more. If you’ve started going naked with credit, you won’t have credit cards to fall back on and blow your budget.
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. 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?
The more mindful you are when you take money out of that envelope to spend it, the more you realise there is a lot of things you don’t necessarily need, you’ll be just as happy without them.
Pay attention, ask the right questions, and you will develop more spending discipline as time goes on.
Have a little fun
Learning to have discipline with money is not all about keeping your nose to the grindstone. I believe you should reward yourself and have a little fun when you reach certain milestones along the way. Each time you accomplish a goal, give yourself a small reward. That helps your brain and spirit understand that good things come with hard work. Then you’ll be more likely to continue on to your next goal.