Why I preach financial discipline

Despite our lack of financial training and advice at school, the internet is awash with financial gurus teaching different systems and techniques for financial success. From paying off debt, to reducing spending, to investing like the next Warren Buffet, there is no shortage of useful, well-written articles available for an interested reader to dive into. Despite this, there is one thing that they nearly all overlook.

To be effective, the reader must want to change their behaviour.

This sounds obvious, but it was really driven home to me a few days ago when I was speaking to a friend who was reeling off a long list of reasons why they couldn’t save any money. First of all, their car needed a new wing mirror. Then, their girlfriend had wanted to get a new table for the lounge. Next, a pair of their suit trousers had torn, and when they’d gone to buy some, they’d seen an offer and bought two pairs. Oh, and of course, they’d got a holiday coming up soon, so that had set them back again. All in, I think they’d struggled to save anything at all since about Christmas – and we’re now reaching August!

I was surprised by this, as my friend is usually very disciplined and has pushed themselves pretty hard to get through tough situations in the last few years. It really surprised me that they could be so irresponsible with their finances.

When I pointed this out to them, they immediately began blustering about how I didn’t understand, and I wasn’t being sympathetic, but I wasn’t having any of it. Admittedly, there wasn’t anything they could do about the car wing mirror, but why didn’t they have an emergency fund saved up? Instead of letting their girlfriend talk them into spending £150 on a new table, why hadn’t they sourced something second hand? (Two of the nicest items of furniture I’ve ever owned were my second-hand wardrobes, and I got the pair for £99 including delivery in 2011!). Buying the trousers was simply daft – they didn’t really need another pair, they just wanted them and could have bought a single pair and saved the extra money from the second pair instead. As for the holiday – well, I hadn’t had a foreign holiday in four or five years before 2017 (much to the chagrin of my partner, who bugged me for six months from Christmas whilst I saved up the cash!).

Developing your financial discipline

I told my friend that unless they developed some financial discipline, they’d find that these reasons not to save would crop up every month from now until the day they started drawing their 50p pension.

If you take the approach of drawing a salary, paying your bills, spending as normal and the trying to save what is left, you’ll always find that you’re left with pennies at the end of the month. It’s difficult to watch all your mates going to the pub twice a week, going on holidays and buying clothes and gadgets all the time, and to have to keep saying “No. I have financial discipline. I need to save money”.

Having financial discipline doesn’t mean that you never say yes to anything. Quite on the contrary, it means you say yes to what you enjoy, but you choose what you do. Rather than just buying clothes because you’re bored, go and enjoy the experience once every six months as a treat. Buy good quality clothes from shops you like and only get rid of things once they’ve reached the end of their lifespan. By doing this, I’ve made items last for years – some of my shirts are more than ten years old, and still perfectly serviceable.

I know I enjoy a nice coffee in the morning, but rather than spending £40 a month buying it at Starbucks or Pret a Manger, I pay £15 a month for fresh coffee and make it at the office with my French press. Likewise, I allow myself four ‘events’ a month – pub visits, cinema or meals out, but once they’re used up, no more. As for larger ticket items like holidays and electronics, I carefully ration myself (again, much to the amusement of my family) until I can afford them.

Finally, I always make sure that I pay myself first. No matter what happens, I ensure that I save something every month (and more than a few pounds too!) so that if I go a bit wild one night at the pub, it doesn’t totally derail my finances for the month.

Sometimes, you’re the only one that can make a difference

I’ve written numerous articles about financial independence, investments and personal finance. But the truth is that you are the only person that can take that information and turn it into a success story. I’m not going to be standing next to you to check you’re paying into your pension this month. I’m not going to check how much you’ve saved into a rainy-day fund. I won’t be calling you at the end of the month to see what you’ve invested in, or to slap you on the wrist for running up debt.

If you’re sitting reading this article and waiting for the perfect moment to change your finances and develop financial discipline, you’re going to be waiting a very long time. You’re basically handcuffing yourself waiting for some perfect fantasy that’s never going to arrive. Instead, the best thing you can do is to dive in and start making things better incrementally.

The first step is to take stock of where you are now. Figure out your income and expenses. Next, decide how much you want to save, and then what you’re going to have to do to get there. Then, have a go at doing it!

When the end of the month comes around, evaluate your performance, and see what you can improve to help you achieve your goals.

No doubt, you’ll make some mistakes along the way. It’s totally natural, but it’s all part of the process. The reason you want to improve your finances is far more important than the exact strategy you choose to do so. Strategies and theories are great, but they’re not what’s going to give you the motivation to save that extra £10 when all your mates are encouraging you to get another pint. By keeping that reason in your mind, you’ll develop your financial discipline, following the framework of incremental improvement and make progress towards your goals over time!




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