PRACTISING FINANCIAL DISCIPLINE

I know that the topic “practising financial discipline” sounds familiar to most of you, but as they say, “repetition is king” so take these simple steps to practising financial discipline as a reminder and act on them without procrastinating.

Heard the story of the young man who inherited his father’s wealth only to squander it all within a few years?

Stories like this have one thing in common, a lack of financial discipline. Being rich is not an inheritance, neither does it happen overnight. To create long-lasting wealth, you need to exercise a certain degree of discipline.

The secret to financial stability isn’t adding side hustle to make more money. Without a doubt, a side hustle would increase your income, but the truth is that even if you make 10 million in a year, it won’t be enough without financial discipline. You need to understand that it is not how much you earn but what you do with it that determines your financial stability. 

EFFECTIVE TIPS TO PRACTISING FINANCIAL DISCIPLINE

BUDGETING

The first and simplest effective tip to practicing financial discipline is Budgeting. Whenever you are expecting or anticipating money from any source, plan for how you want to spend it before it arrives.

I spend my money on paper first before spending it in cash. I write down all my expenses – food, utilities, clothes, debts, rents, etc. and allocate a specific amount to them. 

Each time you use budgeting as a strategy for discipline, don’t see it as an obstacle that keeps you from spending; rather, see it as an accountability measure to reduce overspending. At the end of the day, it shows you where your money is going. 

Your budget is what you make of it, you have a choice to allocate your resources to your needs in order of priority, but be careful not to prioritise your wants over your needs. Practicing budgeting over time makes you more financially responsible. 

SAVE BEFORE SPENDING

The next effective tip to practicing financial discipline is saving. Saving can be a difficult habit to cultivate, especially when you have a lot of financial obligations to meet. Like most people, you probably wait for your pay check, sort out your bills and save what is left – that is if any is left. 

That is a big financial mistake to make; think of savings just like any other bill you sort out. The way you allocate a specific amount for your electricity bill and get it paid, think of savings like that. 

Don’t treat it differently from your expenses. Once you become conscious of this, you would realise that this is the secret to making saving a habit.

 No matter how small it is, endeavour to set aside a certain amount from your income to save.  As they say, little drops of water make a mighty ocean; that N1, 000 monthly will become N12, 000 at the end of the year.

SET A SPECIFIC FINANCIAL GOAL FOR YOURSELF AND INVEST

Another effective tip to practicing financial discipline is setting a financial goal.

When drafting your financial goals don’t just use words, use figures and dates to describe what you want to accomplish and work towards it. That way, you can direct your resources to gradually settling your debt. 

When I made a decision to start investing my savings in dollars, It meant me becoming extremely disciplined to achieve this goal, I paid for an investment course to learn all I needed. Right now, I am seeing the results and I am glad I made that decision. The last time I checked, inflation was at 18%, that’s ridiculously high. So, investing a stronger currency was worth it after all.

With clear-cut goals, you can make smarter financial decisions and channel your money into profitable ventures. 

Your willingness and determination to improve your finances will help you develop discipline.

You just need to power through your financial goals for the year. When you do, your finances will take a turn for the better, and you will have more money to build financial security. 

These are some simple ways to practise financial discipline. Share your experiences so we can learn from each other.