Inspiration – Chase Ro

July 9, 2023

How to Stop Being Undisciplined with Your Finances

Being undisciplined with your finances can seriously undermine your financial goals and stability. Here are some tips to help you become more disciplined:

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Examine Your Motivations

Take time to reflect on why you make poor financial decisions. Are you shopping for emotional fulfillment? Are you unable to delay gratification? Identifying the root causes of undisciplined behaviors is the first step.

Create a Budget

A budget provides structure and accountability. Track your income and expenses, identify areas to cut back, and allocate money to needs, wants, and savings. Having a plan makes it easier to stick to it. Review your budget regularly.

Use the 50/30/20 Budget

This budget method devotes 50% of after-tax income to needs, 30% to wants, and 20% to debt payments and savings. Adjust percentages as needed, but it’s an effective blueprint.

Automate Finances

Automating your finances removes temptation and promotes discipline. Set up automatic transfers from checking to savings accounts and automatic bill pay. Contribute automatically to retirement accounts from each paycheck.

Pay with Cash

Using cash instead of cards can make overspending more psychologically painful. The physical act of handing over cash triggers your brain to reconsider a purchase. With cards, it’s easy to swipe thoughtlessly.

Sleep on Large Purchases

When faced with a big buying decision, force yourself to wait 24 hours before acting. This pause allows your excitement to fade so you can evaluate the purchase objectively. Often, the urge passes.

Cut Up Credit Cards

If you lack self-control with credit cards, cut them up and freeze them in a block of ice. The physical barrier creates an obstacle that forces you to pause before using them.

Seek Accountability

Share your financial goals and spending plan with a trusted friend or partner. Ask them to hold you accountable for sticking to your budget. Having someone question your purchases may help you resist temptation.

Reward Success

Celebrate financial wins and milestones by treating yourself (within reason!). Positive reinforcement will help motivate you to continue making good money decisions.

It takes time to break undisciplined financial habits. But implementing structure, automation, and accountability can put you on the path towards money mastery.