Financial discipline equals happiness! Yes, I am talking about self discipline. Do you have self discipline when it comes to your personal finances? Do you spend money you do not have? Do you take responsibility for your actions? Do you have a budget? Do you save for retirement? Do you pay your bills on time? Almost all financial problems are a result of lack of self discipline.
I remember as a child that I wanted things before I even had money to buy it. I was no different than other children, but my parents said no. Things have changed since I was a child or maybe parents have changed. There are so many more choices now and parents are reluctant to say no. It could be that parents are older and more affluent or just more indulgent. My parents lived through the Great Depression and that shaped their thinking.
Growing up with these values shaped my thinking. I learned through many years that I could not have everything I wanted. Instead, I learned that I would get what I needed. It didn’t mean I was deprived, but I did not get everything I wanted. My parents were very conservative with money! I did not see excess in clothes, jewelry or even how we lived. We went to the movies, dined out and went to museums for entertainment occasionally. This shaped my thinking about spending more than I realized.
I saw my parents always worked and they included me in their work. I learned skills I still use today. One of the skills or habits I learned was discipline. I did not know it at the time, but I learned it anyway. I saw firsthand that my parents were in control of their future. Was it due to self discipline? I used to think it is sheer determination, but the two are related. If you are determined, you have self discipline or will power. They would stick to goals, plans or just worked hard. They never used a label, but it worked!
Were my parents extraordinary or special? I think they were like many immigrants of their time who worked very hard and succeeded. They influenced my thinking through values, actions and as role models. Accordingly, I live my life based on a set of values which guides my thinking rather than how I feel at the moment. Self discipline permeates my thinking to the point; I tend to plan my future much more than most. I use lists, analyze results and take action much more than other people.
What should you do to take control?
- Budget – A budget is a great way to track and control your spending. To prepare a budget you need to make decisions regarding spending and you are certainly more aware of income and expenses. You can use a budget to give you the discipline and eventually learn to make better choices. Reviewing your expenses will help you determine how much is really left to spend after you take care of your obligations. The process should also help you set priorities.
- Planning for the future – Checking off all the boxes is important! Saving for retirement, emergency savings, and saving for major purchases. Planning for the home purchase, car, vacation, education, children and much more is just part of it. Without planning, you become a victim and out of control. Financial discipline means you have control over your finances and your life. The more you can control your finances the happier you will be. Last, financial discipline includes your career which is usually your only source of income. Planning helps you reach financial, career and other goals.
- Risk and other surprises – There are many things that can affect your plans. We have automobile, property, liability insurance for fire, theft, accidents, physical or property injuries, and other risks. There is otther insurance for illness, disability, loss of life, medical, dental, vision or even long term care. These are all risks that could easily derail your financial or other goals. You have an emergency fund for unexpected or unplanned financial problems, but it does not stop there. Last you could lose your job and you should have at least six to 12 months savings for that risk.
- Become a strategic thinker – It is a little like a chess game without a time clock. You make a move and your opponent moves and you have to outthink your opponent. Sometimes, that requires being flexible oradjusting to changes similar to a chess game. Little things such as contributing to your retirement savings is important, but you also need to pay attention to your investment allocation. You need to review your asset allocation periodically (annually) and monitor your progress for your goals.
- Work on your weaknesses – Professional athletes are good at what they do because they focus on their weaknesses. They practice and practice until they are good at what they do. They get good coaching, training or find what they need to get better. Tiger Woods was famous for practicing even after he won a tournament. In Outliers, (Malcolm Gladwell) wrote it takes ten thousand hours of practice to achieve mastery in a field. How many hours do you practice financial discipline?
Self discipline or control can make you happier. Some may think it keeps you from being spontaneous or having fun. Neither is true! Taking control of your personal finances, career or life does not prevent you from enjoying your life. In fact, it is just the opposite! I have had many more choices because of financial discipline and never felt deprived. Some people think financial discipline is little like a diet. Diets are no fun! Financial discipline equals happiness, success, control, and debt free!
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