We live in a society where we must have everything we want right away. We act in an impulsive manner. We don’t care how much those shoes or that TV cost - we just have to have it now. We don’t realize the effects of our choices until we see the credit card bill.
For many of us, the issue isn’t that we don’t have enough money. The problem is that we tend to spend it all as soon as we get it – and mostly on things we don’t need. The secret to getting out of debt and saving more money? Self-discipline.
Self-discipline doesn’t come easy to most people. For many people, money burns a hole in their pockets and they have the urge to spend it right away. The good news is that you can readjust your thinking so you no longer have to live your life broke. Read on to find out how you can change your mindset and save more money by practicing financial self-control.
Learn the basics about money.
The first step is the read and learn as much as you can about money. You don’t need to delve into complicated territory; just try to gain a solid understanding about credit, saving money, debt management and investing – things that can help you create wealth. That way, you’ll get a better understanding of what exactly you need to do to change your habits.
Changing your attitude about money is something that you must really want to do. You can’t be nonchalant about it. Are you really upset that you couldn’t pay your credit card this month because you splurged on an iPhone and ended up broke? Do you regret spending $200 on shoes that didn’t look good on you but you never returned? Do you find it hard to believe that you spent $100 this month on candy, sodas and convenience store junk? Use these money mistakes to your advantage. Think of all the bad financial choices you’ve made and use them to make changes. If you’re truly mad about your spending habits, you’ll feel more compelled to change.
Create a budget.
Create an Excel spreadsheet that clearly lists out all your bills and monthly expenses. Include utilities, groceries, mortgage, car payments, daycare – everything that you’re spending money on each month. The next step is to decide how much you can afford to spend on each category each month. You don’t want to deprive yourself, but if you’re spending $500 a month on fast food, you definitely might want to consider cutting back. Your budget should act as your spending plan so you can develop self-control.
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Stop making excuses.
You may have intentions to pay off debt, but maybe something else came up. You got a new car instead. Your favorite band came to town and you bought concert tickets. Stop coming up with reasons why you can’t pay down your debt. Take control of your financial future. You may have to make some sacrifices now, but you’ll see the rewards down the line when you’re debt-free with tens of thousands of dollars in savings.
Pay with cash only.
If you’re having self-control issues, credit cards simply make matters worse. Leave them at home – or better yet, cut them up - until you can get your finances under control. If you use your credit cards for everything, you’re simply giving in to temptation and causing your financial problems to escalate. Pay for your purchases with cash and you’ll start to get more of a sense of what you’re exactly buying.
Pay yourself first, bills second.
Many of us get into the habit of paying our bills and then using what’s left to splurge on nonessentials. This means that your savings account ends up empty. A good rule of thumb is to pay yourself first. The amount you should put in your savings will vary based on how much you earn and how often you get paid. Take a look at your expenses and see how much you can afford to sock away on every payday. Just $100 a month can quickly add up.
Be mindful about your spending.
Many people go to the store for just a couple things and end up with a cart full of stuff that wasn’t on the list. Chips, cookies, ice cream, candy bars – all of these impulse buys add up, and they’re not even healthy for us. They seem good, so we think we must need them. But before you put these items in your cart, stop and think about why you’re buying this item. Is it something you truly need? Was it on the list? Is it simply an emotional crutch? By taking some time to think about the items you’re randomly putting in your shopping cart, you’ll be more mindful about your spending and decide that you don’t really need the item after all.
If you have a goal in mind, you’re more likely to stick to it. Perhaps you want to pay off your credit card by the end of the year. Maybe you want to save up $5,000 for a down payment on a car. Set a date and start saving toward your goal. If you get off track, set another date in the near future and try again.
Many people lack self-control because they equate discipline with no fun. But any time you want to change your habits, you need to incorporate some fun or you’ll get bored and give up. When you reach a goal, reward yourself with something small but meaningful, like a pint of ice cream, a couple of your favorite candy bars, a pair of earrings or something else you’d enjoy that’s not too terribly expensive.
Nothing is easy. Expect a few mistakes along the way, but don’t give up. Just make sure that you understand what happened, why it happened and take action to make sure it doesn’t happen again. Keep moving forward and keep learning along the way.
Developing self-control takes time. You likely won’t master the art of financial discipline overnight, but if you take it one step at a time, you’ll soon see results. And once you’re disciplined in finances, you’ll develop discipline in other aspects of your life as well.