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Financial Discipline: The Secret to Saving Money and Investing

Achieving financial freedom isn’t an easy goal. Most people start too late and don’t understand the principles of financial discipline. They spend up to their income each month and find it impossible to put aside savings each month.

Lacking financial discipline isn’t good, but it’s a skill that can easily be learned. Once you start,  you’ll get addicted to seeing you savings grow and it becomes easier and easier to live a lower spend lifestyle.

To help you get started with developing a financially conscious mindset, I’m going to give you a few tips. If you do plan on implementing some of these, please don’t do them all at once. It’s a surefire way to get burnt out and fall back to your old ways. Instead, keep them in mind and slowly begin to incorporate them into your daily thought process. Eventually they will be so ingrained that it becomes difficult not to have a financial mindset.

Focus on Input as Much as Output

Stop focusing on output (investments and growth) and learn to think about the input (budgeting and saving). Developing a solid investment plan and learning how to maximize portfolio are great things to focus your energy on. But, don’t forget the importance of spending less and living a life within your budget.

To be honest, learning how to save your money can grow your portfolio much faster than learning how to invest it properly, especially at the beginning. Learning how to budget helps you consistently have money to put aside for savings, in contrast to many volatile investment strategies.

Set Goals

Setting goals is the easiest way to accomplish anything. Goals serve as a constant reminder as to what you hope to achieve and help keep you focused every time you stray from the path that leads to accomplishing those goals.

The obvious question is what type of goals should you set? Well, pretty much anything you want. They don’t even have to directly relate to saving a specific amount of money. Set goals that will just help you develop the financial discipline it takes to save more money in general.

Personally, my goals are to spend <$50 a week on groceries, invest 20% of my pre-tax income in my 401k/ live off 80% and invest 20 hours a week in growing my business and income streams. Not a specific number, but they all equate to developing financial discipline and growing the amount of money I can save month over month.

If you want to take it one step further, write down a short list of your goals and stick them in places you’ll see throughout the day, like the bathroom mirror, on your computer monitor or the dash of your car.

Control Your Emotions

This is by far the biggest skill you can develop to attain a financially disciplined mindset. Ever heard about the sales strategy of evoking an emotional response? Emotions are the root of all impulse based buying and can lead you to spend money on things you don’t truly need.

Learn to reign in your emotions and make buying decisions based on rational thought processes. About to buy something expensive? Well, leave the store, go home, think about it for a day and then, if you still want it, go back and purchase it. In most cases, you’ll get home and realize it’s a waste of money and end up not making the purchase.

Learn to Just Fuel the Machine

Food can be one of the most frivolous costs you can ever spend your money. Your body doesn’t require lavish lunches or eating out every weekend. Get in a “fuel the machine” mindset and learn that you can survive off basic foods.

One great way to develop the “fuel the machine” mindset is by focusing on your fitness. Who doesn’t dream of being in amazing shape? Develop that motivation to get a six pack and start living a healthy lifestyle. You’ll automatically want to eat out less and will naturally learn how to fuel your body without spending lavish amounts of money eating junk at restaurants.

Find a Simple Hobby

Find a simple hobby that keeps you entertained. This doesn’t have to be a free hobby. It can cost money, just not an outrageous amount.

For example, I developed a passion for rock climbing. The rock climbing gym membership cost $50 a month, a considerable sum to spend each month. But, going rock climbing early Saturday and Sunday mornings prevented me from going out on weekends and spending money on food and drinks. Find something you’re passionate about and use it to cut back on other things you waste money on.

Learn to Say No

Sometimes there isn’t any trick you can use to deceive yourself into spending less. You just need to say no. Your friends want to go to Las Vegas for the weekend? Just say no. You don’t have to be rude, but politely declining to attend certain events outside your budget can go a long way towards helping you to grow your savings.

Learning to develop a financially disciplined mindset isn’t easy. It takes time, energy and a lot of self introspection. But, at the end of the day, its a skill that needs to be developed if you truly want to achieve financial independence. Not only will it help you grow your savings, but it will put you in control of your life and how you choose to live it. No one wants to live from paycheck to paycheck, so start taking these steps today and make sure you don’t have to worry about your finances ever again.

 

What do you do to cut back on spending? Have some tips for keeping a financial mindset? Leave a comment and let us know!

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