What Is Financial Discipline?
Merriam-Webster defines "discipline" as "a way of behaving that shows a willingness to obey rules or orders." Though most people associate discipline with social behaviors, it also applies to how you manage your money. Financial discipline refers to how well you are able to conform your spending and saving to the plans that you have set to achieve your monetary goals.
Make a Plan
If you don't have a financial plan in place, it's really hard to be disciplined about how you spend your money because you haven't created any guidelines for yourself to follow. When creating a plan, look at both the short-term and long-term dreams you have. While a budget is part of the plan, the purpose isn't to prevent you from spending any money. Instead, having financial discipline allows you to make sure you have money for what's most important to you.
Use Automation to Boost Discipline
Automating your savings helps you avoid the temptation to spend your money on things you don't need because the money never shows up in your general checking account. Many employers allow you to have parts of your paycheck deposited in multiple accounts. For example, if you want $200 to be saved for your emergency fund every month, have $200 deposited directly into a separate savings account.
Be Accountable for Your Spending
Making sure you track your spending helps you stay accountable for your money management. For example, if you know that you're going to review your spending each week, such as by entering your data in a program like Quicken, you can motivate yourself to think twice before you make an impulse purchase because you know you're going to see the mistake when you review your spending. On the flip side, as you build your financial discipline, you can see the fruits of your labor when you check your account balances.
Rewards of Financial Discipline
It might not seem like fun to turn down spur-of-the-moment outings with friends or purchases, but having financial discipline pays off in the long term. According to the Chicago Tribune, living within your means reduces your stress levels. And, you can make sure you have the money for the things on which you really want to spend. Using a program like Quicken allows you to see all your spending and saving in one place to see how your discipline is helping you reach your goals.