How to Improve Your Financial Discipline | Personal Finance Views

Wednesday, October 16, 2013

How to Improve Your Financial Discipline


Are you amongst the thousands of people who find themselves counting down the days until their next payday? We've all found ourselves doing it however it’s rare that we actually think about why we are left in this situation. When searching for excuses we often blame the recession and the rising cost of living.

Financial Discipline

But is this a valid reason? After all, the recession has been going on for a number of years so shouldn't we have learnt to deal with it by now? Don’t get me wrong, the recession has certainly made a difference to our finances however there is usually an underlying reason as to why we find ourselves struggling to make ends meet.

More often than not financial problems arise as a result of overspending or ill financial discipline. Throughout this article we are going to discuss how you can improve your financial discipline and subsequently ease your financial pressure.

1. Identify areas of overspending

The first step should always be to identify your problem areas. The best way of doing this is by budgeting; splitting your outgoings into categories allows you to see exactly where all your money goes and highlights areas where you are spending more than you should be. Often it is not your essential outgoings that are the problem but your non-essential expenses such as days out, nights out and Birthday gifts.

2. Recreate your budget

Having evaluated your outgoings and identified area of overspending your next job is to reduce your level of outgoings and recreate your budget. By dropping your level of outgoings you’ll be able to see just what effect this has on your disposable income. Simply by saving a few pounds here and there you could find yourself significantly better off when the end of the month comes.

3. Create a spending diary

Even having implemented a budget many still stray off track due to simply not thinking before they spend. The odd coffee here and the odd sandwich there may seem insignificant but if you were to write them all down you’d be surprised just how much you are spending. This is what a spending diary is for; split your page into three columns one as descriptive column where you list everything you spend, one as a costs column listing how much you spend and finally a feelings column where you write down how you felt after spending money.

spending money

The feelings column is very important. As consumers it seems that spending makes us feel happy, however more often than not this happiness only lasts a matter of minutes. After reflecting on the effect that it may have on our finances we then feel a sense of disappointment and regret. By writing down this feeling of disappointment you are then essentially conditioning yourself to link spending with regret rather than happiness.


By creating a budget and a spending diary you’ll find that you become much more aware of where you money goes and how much you are spending unnecessarily. You’ll also find that your attitude to spending changes and your financial discipline dramatically improves.

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