We all dream of an existence in which we have enough money that we won’t have to worry about money again. We want financial freedom. We want to have enough cash for discretionary expenses, savings, investments, and an airtight retirement fund.
However, only a few of us ever achieve true financial freedom.
Instead of working towards financial freedom, many of us live paycheck to paycheck, are burdened with debt, and can’t control impulse buying.
The root of such problems is often lack of self-control and discipline.
The excuse that many will give is that they don’t earn enough money to stop living paycheck to paycheck and to break out of debt. That may not be true. The truth is that what is important is not how much you earn, but what you do with it.
If you lack financial discipline, whether you earn $40,000 a year or $400,000 a year, you will always have financial difficulties.
Learning the discipline you need to achieve financial freedom is hard. It requires significant adjustments in the way you live your life, but it is necessary if you are to break free of your financial struggles.
How Self-control And Discipline Can Lead You To The Path Towards Financial Freedom:
Brainstorm and figure out what you want for your finances
This is the starting point. There are different levels of income, different financial priorities, and different perceptions of what amounts to financial freedom.
You have to examine your current financial reality, ascertain your current and prospective earning capacity, define your financial goals, and develop a realistic plan that will help you accomplish them.
Evaluating your income is very important at this stage. If you are a low-income earner, then it’s possible that what you earn is only enough to meet your day to day needs. If that’s the case, then the focus of your financial planning will be how to budget efficiently, manage credit smartly, and avoid piling on debt.
If you are not a low-income earner, then you can be more proactive with your financial plans. You need to figure out your priorities and how they fit into your income. You also need to define your goals and what you will need to achieve them.
When you know your financial priorities, and you know the level of investment you will need to accomplish your goals, then it becomes easy to plan your finances.
Self-control means finding ways to resolve your bad spending habits
There is no point in making a plan if you will not follow it. If you can’t learn to define your limits and live within your means, then financial freedom will always remain a dream for you.
The ability to discipline yourself to delay gratification in the short term to enjoy greater rewards in the long term is an indispensable prerequisite for success. – Maxwell Maltz
Lack of discipline and self-control are often the reasons for financial difficulties. We live in an era where most people find it difficult to delay self-gratification. We spend everything we earn, and we pile up credit card debt to spend some more.
The realization that you need to change your bad spending habits is the most crucial moment on the path to financial freedom.
You need to figure out your triggers. The events that trigger those spending sprees you never planned.
It could be that you spend recklessly when you go shopping with friends, and you feel the need to keep up with the Joneses. It could also be that your self-destruct trigger is when you are upset, you spend your way back to happiness. Whatever your triggers may be, identify them, and find a way to circumvent them.
Anyone can develop the self-control needed to achieve financial discipline, but you must be willing to kill off bad habits and create new ones.
Create a plan to get out of debt
It is rarely ever the case that an individual has enough resources to wake up one day and just pay off credit card debts, student loans, mortgage, and other obligations. It is more realistic that a long term plan will be needed.
This is not a by-the-seats-of-your-pants-type-of-plan, the type where you start paying your debts without any concrete plan on how such payments influence your day to day needs and other financial priorities.
It is the type of plan you write down with a step by step process to guide you on what you can pay periodically, how to pay in the fastest way possible, and when to settle each type of debt.
When you have an actionable plan written down on a piece of paper or your note-taking app, your brain will be able to visualize a debt-free future, it will see a doable plan, and you will be motivated to work towards it.
Make your savings a priority
Learning to save is not rocket science; it simply boils down to deciding always to pay yourself first.
This means you set out a percentage of your earnings that you will always put into your savings. You must be determined to do this consistently and make it a habit.
If you feel that you lack self-control in this aspect, a good option is to automate your savings. You can set up automatic withdrawals to your savings account and your emergency fund. You should also sign up for your employer’s 401(k) Plan or Roth IRA if your employer doesn’t have a 401(K) plan.
This article has touched on having a financial plan, having a plan to pay back debt, and making savings a priority, but you can’t achieve any of those things without a budget.
Create a budget and stick to it
A budget that is followed zealously is the ultimate expression of financial discipline. A budget makes you identify your financial priorities, define your goals, and what you need to achieve them, and it helps you figure out how to regulate your spending in a way that makes it all work.
You need self-discipline if your budget will be of any significance and tracking your spending is key to making your budget work.
You must have a record of how and why you spent every dollar, and you can do this with a spreadsheet or take advantage of online tools like Quicken or Mint.
Make yourself accountable
The modern world is shaped by marketing. Billions of dollars are splurged on enticing marketing messages yearly to convince us to consume and to spend.
With a system that is designed to entrap you into spending beyond your means, how can you stay disciplined? The answer is to practice mindful spending.
Before you use your credit card again, you need to ask yourself, do I need this? Is this an impulse purchase, and can I do without it? If you answer in the affirmative, then you need to reconsider that purchase.
Another strategy that can help you make yourself accountable is a reward-punishment strategy. When you fail to stick to your budget, you can punish yourself by paying for your excesses from your fun budget.
When you have adhered to your budget over a while, you can reward yourself with something nice to remind you of why you are doing all of these.
Watch the company you keep
You must be wary of social engagements that make you spend above your means. The shopping trips, the visits to the bar, that regular meetup at that expensive restaurant, and other social obligations that make spend outside the scope of your budget, you need to minimize these social engagements, or if possible, do away with them.
Start hanging out with people that share similar financial goals and who find the idea of spending till you drop very repulsive.
Mentally associate financial discipline with financial freedom
You need to start seeing your savings account, your budget, and your debt repayment plan as the factors that will lead you to achieve financial freedom.
When you achieve this shift in your thought process, any disciplined decision you take will no longer make you feel empty, but will instead create a feeling of triumph.
When you start to save, and you see your money piling up, you start feeling happy about having a cash hoard in the bank, and you start looking forward to when you can add more money to your cache.
The same applies to your budget. It takes a degree of self-discipline to stick to a budget, and the feeling of triumph you get when you finally reward yourself for meeting periodic targets is something you need to experience.
Freedom from debt is the ultimate freedom. No more payouts, no more fees, painful sacrifices will become a thing of the past.
You may have heard all of these before. You have listened to speeches, you have read other articles, you have read books, and nothing has changed.
This is the time to get help.
You can discuss your financial difficulties with friends and family members you trust. They know you, and sometimes they may know you more than you know yourself. They can provide the advice you need to make changes that will work for you, and they will also be there to provide the moral support you will need.
If you are not comfortable with the idea of discussing financial difficulties with people close to you, then you should get help from experts.
Self-control is about getting rid of bad spending habits is hard. Sticking to a budget that deprives you of excesses you used to love will be difficult. Spending splurges out of frustration can happen; the key is never to lose sight of your goal.
When you make missteps, don’t sweat it, identify what triggered your mistake, figure out a way to avoid the same mistake in the future, and push forward towards financial freedom.