How to master financial self-control.
So, it caught your attention.
That shimmering leather jacket that suddenly popped up on the left corner of your screen.
It looked gorgeous.
Ignoring it, you tried to focus on the spreadsheet before you.
But the lure of the jacket proves too much, and you click on the image.
It takes you instantly to the amazon site where it's going for "sale" at $100.
You hover the pointer over the "buy now" button, and after a moment's hesitation, you click.
But did you really need that jacket?
You are not alone.
Several times a day, we are tempted to spend on things that we don't necessarily need.
According to invesp.com, about 54 percent of US shoppers spent $100 or more on an impulse
purchase.
Which surprisingly also, makes up 40% of all online purchases.
While it's exciting to click “buy” (credit card in your hand), on the latest shiny object
that attracts your attention, impulse buying wreaks havoc on your wallet.
And it's one of the more significant poor financial habits which keeps you from achieving
your money goals.
At the root of impulse buying and other unhealthy financial habits is lack of self-control.
Learn to control your spending, and you have done over 80% of the work required to fix
your finances.
But it's never easy to break the chains of the short-term gratification built over time.
Especially when you have gotten used to the easy pleasure of getting what you want when
you want it.
Hopefully, by now, you've seen the consequences of a lack of self-control.
A purchase here, a night out with friends there, and the occasional diner at the fancy
restaurant, all seem like a small amount at the time.
But over time, these add up, and you'll wonder where your paycheck goes every month.
You have not made much progress towards your goals, and you're probably neck-deep in debt.
You know you have a self-control problem.
And the solution is plain old discipline.
Without a fair amount of financial control, you'll always struggle whether you earn $20,000
or $500,000 a year.
Becoming intentionally disciplined over your spending is tough.
It will require you to make lots of changes, but it's essential if you are to regain financial
freedom.
And here, you'll learn some strategies to tackle your lack of self-discipline head-on.
The practical and straightforward tips listed here have helped me and several others develop
discipline and regain a grip on my finances.
You will be glad you tried them out.
1.
Set a goal If you don't know where you are going, you
will certainly get lost, and heavens forbid you end up in a serious situation.
So the first step to conquering your self-defeating lack of discipline is to set a financial goal.
The problem with setting financial goals is that most people believe that one; it's too
tasking.
Or two; you may have set goals in the past and didn't follow through for some reason,
so you convince yourself; not to bother, because you most likely wont follow through.
You see, it may however help to make your goals as simple as possible.
Think of some worthy objective for your money and make it your mantra.
With this goal in mind and a timeframe, you can determine how much you need to set aside
from your paycheck each month to meet your goals.
It could be saving up for a down payment for a home, paying for your child's college education,
or saving enough money for your retirement, or maybe even for a vacation.
Picking an objective you feel strongly about will help you muster the needed willpower
to slow down on impulse spending and plan your finances better.
2.
Question every purchase Learn to ask yourself hard questions before
every single purchase.
Do I need this to live?
Can I do without this item?
If the thing is essential to your survival, then ask - is there a less expensive option
or alternative?
You should ask yourself this question about every purchase you're about to make.
About every product you throw into your shopping cart – online or offline.
If the item in question isn't essential for your survival, then know that buying it will
only set you back on your journey to financial freedom.
If you really need the item, then find out if there is a less expensive option that will
render the same benefits.
Putting this into practice will help you develop the habit of considering the negative consequences
of your impulse spending.
It will become easier to say no to things that do not serve your long term goals.
Self-control grows when you can now decline purchases that you would have quickly made
without a second thought previously.
With every penny you're about to spend, always ask, "Is this necessary for my survival?"
Do this Every time.
And Consistently.
And like a muscle, your self-control grows with each intentional consideration.
3.
Draw up a budget Unlike a shopping spree, there's nothing glamourous
about a budget.
But if you must get a grip on your finances and become disciplined, a budget is absolutely
needed.
A budget will help you define your money goals, identify what you need to achieve them, and
prioritize your expenses accordingly.
You can now regulate your spending and avoid costs that do not fit in.
Creating a budget compels you to scrutinize your spending habits.
You'll notice all the frivolous items you spent good money on.
For example; Do you really read all the 30 paid magazine subscriptions?
Unless you are Mark Zuckerberg, Don’t you think 15 grey t-shirts are too much?
You see, budgeting will help you realign your financial goals.
Of course, you'll be momentarily saddened that the latest iPhone or the lovely pair
of Nike Air force doesn't have a place in your budget.
But when you remind yourself that you are delaying instant gratification for a worthwhile
goal – a new house or a fat retirement savings, or maybe even that dream vaction.
You'll find it easier to close the tab or leave the store empty-handed.
4.
Track your expenses.
If you don't devise a means of tracking your spending and knowing where your money goes,
it won't be long before you feel you've lost control.
It's one thing to draft a budget, and quite another to stick to it.
Tracking and monitoring every penny that leaves your pocket carefully ensures you stick to
your budget like white on paper.
Luckily, tracking your spending doesn't have to be complicated or time-consuming.
Although you can use the good old spreadsheet or a pocket notebook, several apps exists
that make expense tracking a breeze.
These include YNAB, Quicken, and Mint, among others.
Whichever method you choose, the objective is the same: record and categorize every dime
you spend.
And then review them to know the areas where you tend to overspend.
The review will let you see that you actually spent more in some categories than you thought
you did.
Carefully think about the areas where you spend the most money.
Is there room to cut back on them?
In most cases, you'll find that you can reduce spending in such categories or totally eliminate
them, and it wouldn't matter at all.
5.
Ditch the plastic Since you don't part with cash when you pay
with your credit or debit card, it often doesn't feel like real money.
Once the transaction goes through, your mind abstracts it, and you don't feel as if you
spent anything.
Fueled by a lack of self-control, this often spells disaster.
A swipe here and a swipe there, you won't realize how much you've spent till you discover
that your minimum credit card repayment bill is on the high side.
The consequences are an increased debt load, which could take you years to pay back, effectively
derailing your financial plans.
On the contrary, when you pay with cash, you will feel your hard-earned money physically
leave your hands, and you'll be more reluctant to let it go.
Ditch your credit card for a while and use cash only for spending, I can absolutely guarantee
you, you will notice a difference.
Cash also makes budgeting easier too.
When you have exhausted the cash allocated for a category of expenses, you don't spend
any more on that.
You'll find a way to make it till the end of the month and use that experience to spend
more carefully in the future.
Avoid using your credit card until you're in the clear and have learned how to curb
your appetite for frivolous spending.
6.
Flee from Temptations You should know your triggers and avoid places
that will make you spend on stuff you don't need.
This could be shopping malls or online sites like Amazon.
Or going for happy hour drinks with friends on a Friday night.
Unsubscribe from online store emails and keep away from shopping sites when browsing the
internet.
By avoiding the places where you're tempted to spend money, you won't have to struggle
against the urge to spend, and you'll keep more of your money where it could serve you
better.
So in conclusion; It's human nature to want to gratify desires
instantly.
Choosing a long-term gratification is harder, but it's always the better choice.
Financial self-control is the super-power you need to develop to always choose the long-term
gains over short-term pleasures.
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