Financial Self-Discipline, and How to Find It

Financial discipline is a tricky thing to manage, whether you’re trying to save for a new family or simply combatting the rising cost of living. Debts rise quickly, and it’s easy to find yourself adrift in a sea of poor spending decisions. These are some simple steps to get you back on the road to financial responsibility:

Review Your Credit Situation

Do you have any credit-related debts, whether with a credit card, overdraft or loan? If you have a credit card, do you really need a credit card? Make paying off any debts your first priority; late payments can cause spiralling interest, landing you in further financial trouble and potential hot water in the long term.

If you struggle initially with the responsibility of paying debts on time, consider cutting up your credit card and making use of a pre-paid card, a banking alternative with no credit or overdraft offering and which enables you to manage your spending day-to-day.

Draw Up a Budget

With short-term debts under relative control, turn your mind to the longer term. What are your financial goals? Draw up a budgeting spreadsheet, starting with two simple columns: In and Out. Plug in your rent or mortgage, average food spend, debts and utilities, as well as your wage and any incoming monies month on month. The difference between the totals of the two columns is your net income. The alternative way to do it is by using a budget calculator.

Next is the hard part. You can create long-term financial goals by making decisions based on your net income. If you’d like to save up to a set amount, decide now how much of your net income you can hide away in a savings account. You can commit to this by budgeting out the remainder of your income for fun and unexpected costs – which leads us neatly onto the necessity to:

Practice Mindful Spending

Now that you’ve committed to saving a set amount each month, it’s down to you to spend what you have left wisely. Remember to keep money destined for your outgoings to one side, and every time a purchase comes around, ask yourself: is this covered in my budget? If not, do I need it? Or do I want it? Anything you need should be noted down in your budget for reconciliation at the end of the month, and potential inclusion in future budgets; anything you want is a different thing entirely.

Can it wait? If you don’t buy it now, will you want it a month from now? Try to be judicious about your spending, and non-impulsive. If you find yourself wanting the item in question a month on, then you may be able to justify tapping into your savings to pick it up.

Don’t Cut Yourself Any Slack

Crucially, you cannot afford to let yourself off the hook. You might find it easy to tell yourself you’ll get back on the horse next month, and that you’re ok to splurge a bit this week, but every excuse you make is another step back into financial chaos. Keep checking in with yourself every day, remind yourself of your financial goal, and avoid temptation where possible.

That said, some things are impossible to avoid – unexpected hikes in household bills, or emergency car repairs. Do not let these setbacks discourage you from your mission; it may be that you were unable to pay for them without financial literacy up to that point!