Discipline is a set of rules regulating behaviour. It involves following a code of conduct or systematic plan. It is very important for you to live a successful life. It helps in self control which is a key factor in financial success.
Financial discipline is the ability to control your spending and be able to have enough instead of spending it anyhow.
It is not the lack of money that makes people face financial pressure but mainly due to inability to manage money very well. It takes a lot of discipline to manage finance for success.
Financial discipline is the key to a successful business. It is the solution to that financial problem you are struggling with.
So, how can you achieve financial success? How can you manage the little you earn without any debts? How can you free yourself from financial challenges that you are facing right now?
It’s simple. Here is how to achieve financial discipline
- Spend less than your earn: One of the reasons why people face financial crisis is due to the way they spend. They spend above their income, thereby having debts to pay. The first universal law to achieve financial freedom is to spend less than you earn. Irrespective of your income, you must not spend everything. According to financial experts, you should apply the 30/70 principle. This means you are to divide your income into two in ratio 30:70. The 30% includes – tithes 10%, savings 10%, and investment 10%. Then the other 70% remaining is what you are to live on. You must be careful in your spending. It is financial madness to buy a pair of shoes for N15,000 when your monthly salary is N15,000.
- Have a budget for your money: It is very important to have a budget for the remaining 70%. If not, it will never be enough. The budget should cover your housing/rent, feeding, school fees, entertainment/recreation, medical, maintenance and other miscellaneous such as Electricity Bills etc. Your monthly income will determine what you allocate to each of the items stated above. Don’t spend more than 30% of your income on rent or accommodation. It is financial irresponsibility to be on an annual salary of N1.2million and be living in a flat where you pay N600,000 per annum.
- Invest Wisely: Invest only in business you understand and familiar with. Don’t rush into any business that you think will yield huge income if you don’t have the knowledge or proper training. It’s better to acquire the right skills and knowledge concerning it before investing in it. A small and safe return is more desirable than risky and high return.
- Avoid shady schemes: Engaging in an unwise or unethical deals and practices is the quickest way to destroy your reputation and fortune.
- Lend wisely: Lend with caution. You can also lend in a way that it may earn you more.
- Diversify: Diversification will help you spread your risk and also increase your income potentials. You should not rely upon one source only, so that you can have other means to fall back on if one is not yielding on time.
- Use professional advice and ensure accuracy: It is part of financial discipline to make use of professional advice from accountants, lawyers etc. You must ensure accuracy by keeping records of all your expenses. Ensure that you separate your personal finance from the business finance and pay yourself a salary.
Financial discipline is a skill that will help you improve and be free from those financial challenges and debts.
Therefore, the major part of financial success is learning the skills of discipline and breaking the habits spending unwisely.
When you make up your mind to practise all these, you will achieve financial discipline.