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  • Ernest Ademola Ehigie

How Financial Discipline Can Save You from Going Bankrupt

If you lack financial discipline, you will always struggle with money, regardless of how much you earn. Having this understanding is critical to building wealth. However, learning financial discipline is not always easy, but it is necessary if you want to advance financially.

Here are some helpful tips for cultivating financial discipline.

Set your financial goals

Setting goals is primary to any aspect of our life, and money is not an exception. Setting a clear goal keeps you disciplined and purposeful with your finances. It is hard to track how well you are doing with your finances if there is no goal in sight. Set goals and stick to them.


Basic financial goal setting should be divided into short-term goals and long-term goals. Your short-term goal includes monthly domestic upkeep, emergency fund allowance, minor household projects, weekend hangout and the like. While long term financial goal setting includes buying a house, big project funding, retirement savings etc.


Separate your needs from your wants

Knowing the difference between your needs and your wants is critical to maximizing your finances, especially when you have a limited budget for spending. Having a good understanding of your needs and wants will guide you into setting smarter financial goals. Also, this mindset helps you to become more disciplined with your finances.


Think through before making any purchase. If an item or service falls under your needs, you can go ahead with it, but if they fall under wants, it can wait until you are sure you still really want it as much as you think you do.


Learn Financial Management 101

Don’t leave financial knowledge to finance experts only. You may not know how your country's entire stock exchange and fiscal policy works, but have some basic knowledge of your personal finance, savings, and investment.


You can easily access the most basic information online. Read books, blogs, and take courses about personal finance, getting out of debt, etc. Go on YouTube and watch videos of DIY on personal finance and the like. This knowledge shapes how you see money and helps you to cultivate healthy financial habits.


Make plans and practice mindful spending

Cultivate the habit of making plans for how you will spend your money on paper before you actually spend it. Have a written monthly budget of your expenses. This habit helps to build your discipline with money.


Also, practice mindful spending, and avoid impulse buying. Before you spend money, ask yourself questions like: Can I do without it? Do I really need this? Is this what I came to the shop to get? Am I buying this to show off?


Avoid peer pressure when it comes to spending. The subtle advice and seemingly harmless suggestions from friends may lead to financial struggles.


Avoid peer pressure when it comes to spending. The subtle advice and seemingly harmless suggestions from friends may lead to financial struggles.

Pay Yourself First

Save money from your income before you spend. The conventional thought is to spend and then save the rest. But this is one of the reasons why a lot of people are not able to save.


Open a high yield savings account and save a particular amount of money every month. The best way to go about this is to deduct a certain percentage from your monthly or regular income. Pretend this amount is another monthly bill that must be paid, so you won’t feel tempted to spend it. This helps to create a system of consistency and encourages the discipline of saving.


To save for retirement, open a Retirement Savings Account (RSA), and have 10% of your income go into your RSA. Your RSA is money set aside from each paycheck and deposited with a Pension Fund Administrator (PFA) for a financially stable life in retirement. For more information on RSAs, contact Oak Pensions via www.oakpensions.com, info@oakpensions.com or call the Marketing Manager on 09087448661.


In conclusion, financial discipline is an essential habit to cultivate, because it spills over into other areas of your life. When you work on being disciplined in one area, such as finance, the principle tends to rub off on other areas of your life, creating a more disciplined lifestyle.


In conclusion, financial discipline is an essential habit to cultivate, because it spills over into other areas of your life. When you work on being disciplined in one area, such as finance, the principle tends to rub off on other areas of your life, creating a more disciplined lifestyle.

 

ABOUT THE AUTHOR:

Ernest Ademola Ehigie is a Copywriter, Content Developer, Author, Brand Consultant, and Communications Manager with over 5 years in marketing communications. He has written several articles, policy documents, press releases, radio and TV adverts for businesses and organizations. He's the author of the book, "Why You Must Lead" and currently works as a content manager for Detail and Avedia, a leading retail and media consulting firm.


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