You Cannot Build Wealth Without THIS

Many things are important when improving your financial situation.

• Your income.

• Your knowledge.

• Your investment returns.

• Your spending.

But, none are more important than your financial discipline.

And in this blog, I’m going to explain why this is the case.

What is Financial Discipline?

There are three core sections to your personal finances:

• Earning — how much money comes in.

• Spending — how much money stays.

• Investing — how much money your money makes.

With earning & investing, you need more knowledge on how you can improve in these sectors.

Spending, or improving your spending habits in particular, is different.

There isn’t a lot of knowledge you need, to improve your spending habits.

It’s 10% knowledge, and 90% discipline.

Discipline, means training yourself to stick to a set of rules set upon yourself.

In financial terms, this means being able to avoid urges and financial impulses to achieve a greater goal in the future.

It’s similar to delayed gratification, and it’s the most important part of personal finance.

You can earn all the money in the world. But, if you lack discipline, you can find yourself in a worse position than someone who earns a fraction of what you do, but is more disciplined.

There’s a big problem in today’s society.

I’ve called it the image pandemic.

It’s about people “wanting everything now”, and spending all their money on things to make them look wealthy, rather than actually becoming wealthy.

This lack of discipline leads directly to people not living lives they want to live.

And it’s all down to one thing:

Discipline. Well, a lack of it.

The Importance of Discipline

There’s a strong correlation between how hard something is, and how rewarding it is.

I like it when people say:

Hard choices, easy life. Easy choices, hard life.

Because it’s true.

If you make the easy choice today:

• Not exercising.

• Impulse purchases

• Buying a takeaway.

Your future gets that little bit harder. Sure, once or twice won’t hurt, but making a habit out of these things will hurt.

In contrast, making the hard choice:

• Cooking at home.

• Going for a run.

• Investing your money.

Your future gets that little bit easier.

Discipline compounds. It can be hard to start, but once you start to see results, you’ll become addicted.

How to Become More Disciplined

Identify Cues and Triggers to Habits

The majority of your financial decisions are subconscious, meaning they’re done through habit, not conscious action.

If you’re on a mission to cut down on unnecessary spending, understand that there are triggers to habitual actions, which leads to you doing things without thinking.

Some examples of triggers are:

• Buying a coffee — walking past the coffee shop to work.

• Overspending on clothes — having shopping apps open on your phone.

• Eating takeaways — not having enough food in the house.

If you can identify (and avoid) the trigger, you can remove the bad habit.

• Walk a different route to work.

• Delete shopping apps.

• Make sure you’ve got food indoors.

Trigger avoided? Habit eliminated.

Shoutout to James Clear for this one.

Acknowledge an Opportunity Cost

Every time you buy something, you eliminate the possibility of buying something else.

Apart from really small purchases, I’m always thinking about the things I could be buying if I were to spend money.

Sure, necessities like:

• Rent

• Food

• Fuel

And more, don’t matter. We need these things.

But if you ever feel like treating yourself, and buying:

• A takeaway.

• A new pair of shoes.

• A mini vacation.

Take some time to acknowledge what you won’t be able to do if you buy it.

A huge amount of decisions I make each day are made with the intention of improving my life in the future, and it’s a method that works.

I’d recommend you do it too.

Think Long Term

Similar to the previous point, having a plan for your life and finances which spans:

• 10 years

• 20 years

• 30 years

Or even more, can help your discipline in the short term.

Everyone should aspire for better, whether than be:

• Mentally

• Physically

• Financially

And you should always have a plan.

Fail to prepare? Prepare to fail.

Having a plan that you think about every day can help your discipline, by cutting out the things that won’t help you achieve your big goal.

• “I want to retire at 50”.

• “I want to become a millionaire.”

• “I want to buy a Lamborghini.”

I live by a short sentence which serves be exceptionally well.

Set big goals, and crush them.

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