How self-discipline and self restraint go a long way in staying in control of your finances
Headlines today are constantly trumpeting the financial woes of everyone from CEO's to the average Joe. It seems like everyday there is a new financial crisis facing a business, organization or just the everyday citizen. It tends to make one wonder exactly what the problem could be to be affecting so many people. Both financial experts and sociologists are quick to point out that the main problem affecting those with financial problems is a lack of self-discipline and self restraint. In this world of easy credit and "I want it now" mentality few people seem to have the restraint to save up and make purchases they can afford. Sadly this course of action can lead to disaster as seen in the many foreclosures and bankruptcies that are happening daily. If you are looking to construct a positive financial future here is what you need to know about how self-discipline and self restraint go a long way in staying control of your finances.
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- Stop using your credit cards for everyday purchases. Most consumers report that one of the biggest challenges in today's credit driven world is the tendency to use credit cards to purchase everything. The careful use of credit cards can be good thing but most financial studies show that many credit card users feel a disconnect between using their credit card and real money. In other words few people feel that twinge when handing over their credit card versus a wad of hard-earned cash. If you have a tendency to use your credit card for everything than choose one of the following two options-
- Use your credit card like a check recording each purchase in your checkbook like you have written a check. Than at the end of the month you will have the money to pay off the entire credit card bill. This tends to make more of a connection to your real money since few of us would deliberately write a bad check.
- Budget cash for certain parts of your budget. If you tend to overspend on a particular area especially luxuries (eating out, clothes, travel etc.) than budget a specific amount of cash. Leave your credit cards at home and once the cash is gone, it's gone. This also will force you to develop more self-restraint in how you spend.
- Determine the difference between needs and wants. One of the most important things you can do in developing self-discipline and self restraint is to learn to make the determination between needs and wants. Once you can rationally determine that your 15th pair of shoes is a want and not a need you can begin to control your financial life. While no one advocates giving up wants by openly acknowledging them you can take control of your spending and make wiser purchases.
- Plan and save, save and plan. If you are constantly working on improving your financial life you will be able to accomplish the goals you have set for yourself. One of the biggest problems with today's financial environment is the need to have what we want-now. We have refused to give ourselves the pleasure of saving and planning for a longed for purchase. As a result we have burdened ourselves with overwhelming debt and today's parents are showing the next generation little of financial self-discipline or self restraint perpetuating a bad cycle of financial mismanagement.
- Know where your money is and what it is doing. Even if you are one of a lucky few who make a good living, have little or no debt and can afford many of the luxuries of life you may not now where your money is and what it is doing. Today's savvy financial consumer will be on top of their budget, short and long-term financial plans and investments. If you are simply assuming that your money is working hard enough for you without really knowing you could be making a critical mistake in your financial life. Knowing how much money you are spending and where it is being spent is crucial in developing self-discipline and self restraint in your finances.
