The Art of Building Financial Discipline: Simple Strategies for Taking Control of Your Money

One of the frequently used terminologies in parenting circles is the word ‘discipline.’ We discipline our children not to harm them. We do this to train them in the correct way and the right discipline usually comes from a place of love. A desire to ensure that our kids have a solid foundation for their future. A yearning to ensure that they turn out well and will be able to navigate life as adults.

Regardless of your income, practicing financial discipline can be viewed as a form of self-love when it comes to managing your finances. If you find it challenging to practice financial discipline, it may be worth reconsidering your life’s purpose and whether the love you have for yourself is genuine and authentic. Typical of me, I found a way to weave in wellness to your attitude of financial discipline.

To the main question, how does one maintain financial discipline?

You have to know where you are NOW and where you want to GET TO

If you know your current financial status and where you want to get to, it is much easier to decide the approach to use to get there.

What is your total income in a month from all sources?

How much do you spend in a month and what do you spend on?

If you do not have the answers to these two questions, this is a cue to cultivate the habit of tracking these on a monthly basis. Tracking helps you to see the gaps and know where to cut down on expenses. Most importantly, it is a good reference for personal budgeting. Some of us are good at meeting our corporate budgets. However, when it gets to setting and sticking to our personal and entrepreneurship budgets we fail at it.

Now you know your position (I trust you to!), what comes next?

Kudos! I am assuming that you will start tracking your income and expenses after reading this post. With good data, you effectively make a decision on your goals and work to draw up a budget to get you there.

Does your current income take you closer to your goals?

Do you need to consider an additional income source?

Can you save money by cutting down on some expenses?

Based on your responses, what are you going to do about it? This should be the point you call your bestie or pick your journal to make notes for goal setting consideration.

Create a savings and investment plan that will take you closer to your goals

There is a 10% to 20% rule of thumb for putting money aside for the purposes of savings or investment. I also learnt from one wise person that you should assess your age and increase this percentage the older you are. This is because as you approach retirement age, the time you have to save is shorter, meaning you’ll need to set aside a larger portion of your income compared to a younger person with more time to save. Break down your goals into short-term, medium-term and long-term.

With the current uncertainties, it is best to contact an investment advisor to help you design a good investment plan considering your investment goals and your risk tolerance level. If you are true to yourself and know that at a point you won’t be consistent with this, I will suggest you set up a standing order with your bank or open a separate account with a bank with no ATM and other restrictions that will make it burdensome for you to easily access your funds.

Emergency fund

Your blood pressure can skyrocket if, after months or even years of saving and investing, an unforeseen incident occurs and wipes out all the consistency you’ve built up. On the bright side, you did not have to borrow money to meet this unforeseen incident. Aside your funds for savings and investment, set a percentage of your income aside for such unplanned incidents.

Expenditure review

As earlier stated, track your spending patterns. With time you will be able to identify expenses that are not necessary eg. recurring subscriptions for a plan you no longer use, unplanned spending etc. Having this data will help you review your expenses, make a conscious effort to segregate them between wants and needs and take actionable steps to spend wisely. Remember the saying, ‘Cut your coat according to your size.’

This is one thing I tasked myself to do in 2023 and so far, I am doing good! I also review my bank transactions for unusual charges and transactions too!

I always encourage people to set money aside for training and development, education and self-care. I know mothers and fathers are working hard to lay a good foundation for their kids. We buy every good thing under the sun for our kids but forget or like a spell cast on us we find it difficult to spend on care activities for ourselves. I am an advocate for self-care and self-development. On the contrary, it is not a waste of money but an investment in your self and health.

Beautifully said, but I might not be consistent with this

Don’t think you can do this? It is perfectly fine, some people can go solo on this, have the funds to afford to pay an expert or join legit groups that serve as accountability mechanisms. It could also be a new challenge for you, create one where you keep each other in check as accountability partners.

Hope these tips are useful.

Out of curiosity I asked chatGPT to create a mnemonic for building financial discipline and these are the results! Not bad huh?

Remember, saving and investing is a long-term process, and it’s important to stay committed to your goals even in uncertain economic environments. Building financial security takes time and effort, but with a clear plan and consistent effort, you can achieve your goals. Stay informed: Keep up-to-date with economic news and market trends to help inform your investment decisions. However, be careful not to let news or hype influence your decisions too much.

B.U.I.L.D.

B – Budget and Stick to it U – Use cash instead of credit I – Identify savings goals L – Look at your progress regularly D – Develop automated savings.

Remember to “BUILD” your financial discipline by making a budget, using cash instead of credit, identifying savings goals, looking at your progress regularly, and developing automated savings.

What else do you want to know, let me know in the comments or via email at connectwithopie@omtsdigest.com/ omtsdigest@gmail.com.

Lots of love,