Discipline Financial Management is the process of ensuring you handle your finances, both personally and professionally, with some focus. Financial management usually involves creating some kind of financial planning system or tool and sticking to it. Discipline financial management is the actuality and willingness to actually stick to the plan you have devised.
What is Financial Discipline?
This is the reality of how well you can manage your finances and expenses, your saving habits, and your personal goals. By being financially disciplined you should be making very good use of your earned money, investing it, and using it wisely. Having this approach will allow you to help prevent future cash flow issues or mitigate any future risks.
For some people financial discipline comes in the form of creating extensive spreadsheets of profit and loss accounts, for others, it is a document that includes their goals and the process to reach them. Regardless of the format, just completing the exercise of deciphering a plan can really help focus your goals and strive to achieve financial targets.
Financial discipline has the same intrinsic value for both your personal accounts and that of your business. The same processes can be carried out to help aid a business to become financially disciplined, in fact, this is where discipline financial management was created.
Discipline Financial Management
Being financially disciplined is really important, most people strive for financial freedom but discipline needs to be mastered before this is achieved. There are many ways one can prepare themselves in order to reach their financial goal, a few are described below –
1. Be Realistic
This is the most important focus when attempting to be more disciplined with your finances. Setting unrealistic goals can make you feel like you aren’t doing enough to reach them, or underachieving. Sometimes unrealistic goals can see you go without and then send you into a downward spiral that usually involves picking up old habits.
2. Make a list
When you organize your priorities or put pen to paper by developing a list of desired outcomes for most people this makes them more real. It is a great way to keep you motivated, physically cross off the tasks you have completed and continue adding as you need to.
3. Get a clear picture
Before starting to think about the methods of saving money you must be sure you understand the path you will need to go down and what it will help you achieve. You must evaluate the actuality of your income and what you truly want to achieve.
4. Develop a budget
This should be another serious focus when creating a disciplined financial management planning tool. Having a realistic budget that captures all of your spendings will help you to set goals, make informed decisions and allow you to put some timescales against your goals. Having this identified and revisited as you continue to smash your financial targets will help you to strategize and plan more effectively.
5. Save a set amount every month
This is a great tactic for personal discipline financial management. By defining a set amount of budgeted savings each month you can easily forecast when you will reach where you want to be. Even the smallest amounts can have a really positive impact if you have long-term goals. IT is important to be patient and dedicated when saving a specific amount every month.
6. Set yourself goals
Goals can come in many shapes and forms, for some people they need to see physical goals, for others it is reaching a new total amount in their savings. For some disciplines, financial management action is being taken to ensure that a business can afford new items in order to get better customers/reviews. For some it is a personal goal, the money will allow them to put down money for a mortgage.
7. Be specific with desired outcomes
Whilst goals can be generic at first, once you start getting down to the reasons why you are saving, or when times get a bit difficult it is important to have specific, personal desired outcomes highlighted. These can be continually adapted or further as your understanding grows.
8. Change your spending habits
To see any real positive impact in your discipline financial management model, your spending habits must adapt. This can be either in the form of making a massive adjustment, such as choosing to stay with family or friends and giving up an apartment or asset. To just be conscious of your choices when shopping, not using expensive brands, and opting for items on sale. Little changes can make massive financial savings.
9. Make saving motivating
After a while, you will be able to start achieving some of the goals that have been set to help you save. This can be extremely motivating, giving you just the focus you need to keep on at it and achieve more of your financial goals. If you are able to make saving just as motivating as the rewards of doing so you will find the whole process very rewarding.
10. Challenge yourself
To make a real change you will need to truly ask yourself how much can you save? What can you cut back on? Are there any other changes I can make to get the desired results? Remember to fully challenge yourself to feel the most satisfied and rewarded.
Conclusion
Discipline financial management is a major component for both businesses and people on a personal level to take charge of their finances. By following the steps above, and making a conscious effort to stick to them, you will become much more financially disciplined and able to follow a management structure that best suits your needs.
