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Financial Wellness

Try This Framework for Financial Discipline

With inflation at a 40-year high and the spike in the cost of living, many people are experiencing financial worries. Sometimes it feels easy for some people to save without the temptation of spending money, while others struggle and splurge. One of the main causes of financial stress is a lack of self-discipline. By creating a plan to develop financial discipline, you can improve your financial situation, ease money-related worries, and achieve your goals.

Sixty-two percent of Americans experience financial stress and worry about money. Dealing with financial problems is stressful. For eighty percent of Americans, a lack of financial education has led to costly mistakes. With growing debt, overpriced loans, and confusion over investing, a lack of knowledge is holding many people back from financial freedom.

What is Financial Self Discipline?

In today’s world, it’s easier to spend money than ever before. There’s an app for every kind of delivery that caters to impulse buyers. For many people, the problem isn’t that they don’t have enough money. Instead, they tend to spend it on things quickly that they don’t need. 

Financial discipline means being mindful of your spending. It refers to how well you can control your spending to achieve a specific goal. Often, the secret to getting out of debt and saving money isn’t to have more but to practice self-control and discipline with your finances.

Money Management: 4-Step Framework for Financial Discipline

Learning self-discipline around money is not easy. Many people spend money as soon as they have it. The good news is that there are more opportunities than ever to educate yourself and achieve wealth. Adjusting your mindset around money can teach you to execute more financial self-control. To get started, here’s a four-step framework for financial discipline.

How to be DISCIPLINED with MONEY and PROSPER ︱ Richard Fain

Focus on Delayed Gratification

Delayed gratification is the ability to hold off on the immediate reward in favor of a greater and long-term benefit. Often adults tend to experience financial problems because of the inability to delay gratification.

For example, instead of purchasing an item you can’t afford using a credit card, save enough to avoid borrowing. This would result in avoiding extra fees and interest. Delayed gratification helps you to resist impulse buying so you can focus on achieving your goals.

Although you want something now, putting it off could mean getting something bigger, better, and more rewarding in the future. By developing the ability to delay gratification, you learn to have greater self-control. The next time you think about splurging on a big-ticket item, think about your financial goals and how you would feel if the reward was larger in the future.

Evaluate Your Spending

You need to evaluate your spending to improve your chances of achieving your financial targets and fulfilling worthy goals. That means sealing the money drain that sucks up all your cash as soon as it comes.

female with cheerful expression, holds smart phone and credit card.
Evaluate your spending to achieve your financial targets. (Image Source: Shutterstock)

Look at your bank statement and find how your money slips through your fingers. Once you start learning more about money and tracking your spending, it can be a real wake-up call as to where it all goes.

For instance, buying a coffee every morning before work adds up. Or maybe you have unused memberships or subscriptions racking up each month.

Although it’s impossible to avoid all monthly costs, look at your larger expenses and try to keep them as low as you can. That could mean renting a simpler apartment so you can save more and buy your own place sooner.

Set Specific Goals

Set goals and be specific. Split your goals into short, mid, and long-term goals so you can understand what you really want to achieve now and in the future. Perhaps you want to pay off your credit card debt, save for a down payment on a house, or start building a nest egg for retirement.

Breaking down your goals into steps can help create a plan to help you hit your targets. Remember to set realistic goals. While you may not be able to achieve them yet, over time, you can start to pave the way there.

For example, it’s unrealistic for most people to put fifty percent of their income into savings. With rent, food, and bills to pay, it’s not setting you up for success. But you can look at your income and set a realistic goal that you can hit monthly based on your financial situation.

Create a Realistic Budget

The key to personal banking and budgeting is to set a realistic plan. So, look at all your outgoings like living expenses, rent, debt, and savings. Then, note any costs that remain the same such as what you spend on food, utilities, and entertainment. List every area where you spend money so you can start tracking and holding yourself accountable.

Budgeting for Beginners – How to Make a Budget From Scratch

After looking at all your expenses, think about how much you want to allocate to each area. The point isn’t to deprive yourself of fun and enjoyment. But if you’re spending $500 a month on fast food, this could be an area you could cut back on. Having a budget allows you to develop more financial discipline and reach your goals more effectively.

Improving Financial Problems Through Discipline

Developing financial discipline and self-control isn’t easy. But it is an essential step in improving financial problems and managing your money. It’s normal to make a few mistakes along the way. The important thing is to keep going. Try to understand how you made a mistake so that it doesn’t happen again.

By taking one step at a time, you’ll start to see results and feel much more in control of your finances. You don’t need a qualification in economics to manage your finances. Follow this four-step framework to set you on the right path. Once you develop more financial discipline, that self-control can spread and benefit other areas of your life.

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