Becoming rich doesn’t usually happen overnight. When it does, it usually doesn’t last very long. The main reason this is true is because in order to become rich and have wealth that lasts, you must have a certain amount of financial discipline over a long period of time.
As an entrepreneur, you need a lot of discipline when it comes to spending money, especially on things that are not really necessary. If you don’t have a financial plan in place, it’s really hard to be disciplined about how you spend your money. This is because you haven’t created any guidelines for yourself to follow in the first place. When creating a plan, look at both the short-term and long-term dreams you have.
While a budget is part of the plan, the purpose isn’t to prevent you from spending any money. Instead, having financial discipline allows you to make sure you have money for what’s most important to you.
You must know that being financially disciplined can make you rich. It helps you save for rainy days. That’s the problem I have with average salary earners; most of them finish up the salaries they have not earned and even have an IOU waiting for the money before the end of the month.
So, how does financial discipline make you rich?
1. Live below your Income
It makes a ton of common sense, but most people don’t do it. Having financial discipline means living below your means and not overextending yourself like most people consistently do. I know people who don’t earn much but are rich. It’s simple common sense and not rocket science.
2. Avoid Debt as much as you can
Living without debt definitely takes financial discipline, but I can tell you from personal experience that it’s one of the best things you can ever do financially. Debt sucks you dry financially, costing you thousands every year in interest and fees that could be going into investments. Simply structure your monthly spend and plan ahead for capital projects.
3. Always use a Budget
Good financial discipline means always having a plan for your money. Having a plan simply means doing a budget every single month and sticking to it. Most people look at a budget as a tool for deprivation. But at its core, a budget is simply a tool for telling your money where to go so it’s used as efficiently as possible. When you use a budget to eliminate financial waste, you have more money to spend and invest for the future. You will never spend more than you make so eventually you’ll have the rich life you want.
4. Spend what is left after saving
Many people save what is left after spending. This strategy doesn’t always work. When it comes to your hard earned money, no one deserves to keep it more than you. You can even instruct your bank to automatically transfer to your separate savings account every month. This will help you a whole lot.
Staying on top of your finances may be hard at first, but it’s worth the effort — and over time financial discipline becomes easier.