Financial discipline is how you manage and control your spending as well as your income. To be financially disciplined, there’s no need to cut down a lot on your spending, save lots of money, or live below your means.
It comes with the practice of thoughtful spending habits and smart management of your finances. So how to be financially disciplined?
Let’s learn the five most important habits that will help you achieve financial discipline.
Here are five habits that you should build to be financially disciplined.
Many of us have used credit cards because of the cashback benefits they give us with every swipe. However, those swipes sometimes can cost you a lot of money if you forget to repay them on time. These days, debit cards also offer similar benefits without the burden of late payment fees.
The way prepaid debit cards work is that you first top-up the amount on your card, and then you spend it. For example, the Letsgo Payit card offers cashback, discounts, deals, and the chance to win eGift vouchers and many more.
It is a prepaid debit card where you can top-up as much amount as you would want to spend and use only that much money to spend. This way, you can control your spends and you get one-step closer to becoming financially disciplined.
Quote: “Do not save what is left after spending, but spend what is left after saving.” – Warren Buffet
Managing payments involves handling various monthly expenses such as phone bills, utility bills, rent, and school fees. Some of these payments like, rent and school fees, you can pay in advance but you will lose the opportunity to use that cash otherwise.
Hence, to be financially disciplined, you must find a way that can help you manage your payments efficiently without missing their due dates. For example, you can use the Payit mobile wallet app and pay all your bills and fees from one app.
Additionally, you will get exclusive offers and deals along with chances to win exciting prizes with the app.
If you want to achieve financial discipline, you need to know where your money flows. For this, tracking expenses is helpful as it provides you insights into spending behaviours.
For this, you can use various methods such as writing down your expenses for a week in a diary or using a budgeting app. You can see where you spend your money if you track them regularly and eliminate unnecessary expenses.
It would also help you differentiate between needs and wants. While expenses that fall in “Needs” cannot be avoided, you can control frivolous expenses after your “Wants”, which can be dining out with friends or memberships that you do not utilize.
Also, read A Quick Guide to Investing AED 1,000 in the UAE.
Are you someone who gets distracted by a new device launch or wishes to buy that “one more thing” just because you like it? If the answer is yes, you need to stop that trait. Impulsive decisions may not seem much at a particular moment, but they can result in a significant amount over time.
To avoid this, adopting a “sleep on it” rule can be helpful. This means instead of instantly making a purchase; you take a day to decide whether you actually need that thing or just want it because it is good to have.
This will help you save money in the long run, which you can invest to achieve the goals that really matter, such as buying a house or saving for your retirement.
Going old school with the envelope system means trying a budgeting method that helps you control your spending by using cash for expenses.
In this, you divide your take-home pay into spending categories, labeling envelopes for each category and allocating cash accordingly. This can be for utility, dine-outs, entertainment, etc.
The concept is simple. Once an envelope is empty, no more spending is allowed in that category until the next budget period. This approach helps you create a strong emotional connection to money, making it harder to overspend.
Read Also: 5 Tricks to Save Big in Dubai
There’s no shortcut to financial discipline. However, mindful spending and conscious saving will help you achieve one. These five habits are practical ways to develop healthy habits for managing your finances and being disciplined.