Money Talk With Slater

Making Money Across the Board

MONEY & SELF DISCIPLINE

 

SELF-DISCIPLINE AND ITS RELATION TO MAKING MONEY

There is one thing that is common with billionaires, self-discipline. The ability to do what must be done. If they commit themselves to saving a certain amount of money every month, they do that no matter how they feel. They are able to sacrifice their personal wants like partying every weekend, to ensure that they achieve their objective.

Making money needs a high level of self-discipline. But don’t worry if you have low self-discipline, because it’s a skill you can develop by practice. They say it’s like a muscle the more you train, the more it grows, and everyone has a starting point. It does not matter how much you make, if you lack discipline with money you will always be living from one pay check to another, almost buried in debt and the accruing interest and with no savings.

So this is how to get disciplined with money

  1. Eliminate the object of temptation.

Always having available cash to spend, be it in credit cards or liquid cash, increases the chances of impulse buying. You will never be able to stick to your goals if you walk around with excess cash and you have low level of personal discipline.

Am not saying that cutting off expenses is the way to make money. But spending without a plan is a sure way of staying in debt. Everyday anticipate your expenses and just have enough to cover those expenses.

If you have low self-discipline avoid credit cards as much as you can. Avoid the situation of buy now pay later. This will enslave you to debt and credit card interest. You will always be living beyond your means thus spending a future income that you have not earned.

  1. Save first and spend the remainder.

One sure way of saving, is to ensure that you are paid net of your savings. That savings are deducted from your earnings automatically before you receive them. This will eliminate the chances of spending all your earnings in paying bills. There is a lot of will power needed in saving, unlike the temptation of indulging yourself in unplanned expenses.

Therefore pass the risk of making the decision to save to someone else. Let your employer automatically deduct and remit a part of your earning to your SACCO, or have a standing order with your bank to remit money to whatever mode of saving you have.

  1. Write down your goals and pursue one at a time

Someone one told me that “If you pen it, you will think it.” So write down your goals. What you want to achieve in the long run and short run. Strategize on how you are going to achieve these financial goals. As you know if you fail to plan, that is a good way of assuring yourself a fail.

Pursue one goal at a time. As pursuing many goals at the same time is draining, especially to people with low self-discipline. For example, if your goal is to get out of debt in two years’ time, increase your savings and increase investment. Start with discontinuing the many credit cards you have. You cannot quit drinking by drinking more. The same way you can’t get out of credit by borrowing more. With the reduced spending ability, you can focus on repaying the debts. After that you can think of increasing your savings. But you can’t achieve the two at the same time. That will overwhelm you. So pursue one goal at a time until you develop the muscle to tackle multiple goals at the same time.

  1. Think before you spend

If you want to gain that financial discipline and freedom, you have to think before you spend your hard earned cash. Estimate your future expenses and never over estimate your income. Before you spend ask yourself:

  • Can I do without this item of expenditure?
  • Am I buying this to make others happy, or because of outside pressure?
  • Is this item worth this much or can I get the same at a cheaper price?

This will make you cautious on what you are buying. Sometimes you can get an item at much lower price, in other not so prestigious shopping outlets. Always make sure you use your bargaining power. It will save you a couple of dollars that cumulatively is a lot in savings.

  1. Focus on your success not your failures

Definitely you will fail in achieving your plans more than once. That is life; it has a way of beating the hell out of us. The secret is in focusing on your success and moving on past your failures. You overspend today, that does not mean that the whole plan has failed. Dust yourself and move on. You only fail, when you don’t rise up and try again.

Remember I said that financial discipline is like a muscle. The more we train it the better we become in controlling our finances. Don’t be too hard on yourself. Celebrate your achievements and learn from your mistakes.

  1. Put up control systems

For company to succeed in cash control they rely on the strength of their internal control systems. Also an individual can put up control systems like budgets and weekly reviews to see where you are going wrong. You can use the envelope system, where you separate cash needed for every expense item in your budget. This will go a long way in ensuring that you don’t over spend in one area, and you don’t spend over your earnings.

Control systems ease your decision making. They help you in analyzing your financial activities and pointing where you are going wrong. Establish a system and stick with it.

The above ways to financial discipline are not the only but if you follow them, you will see that change that you desire in your finances. Am again not promising they will be easy to follow but the rewards are worth the effort. It’s not that billionaires were born billionaires, it’s how they spent their hard earned cash to improve their net worth.

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