Do you have a terrible track record of making ill-advised, emotional decisions with your money? If so, you probably suffer from a lack of self-control. And the only way to overcome your financial troubles is to establish better discipline in this all-important area of your life.
How to Embrace Financial Self-Control
People often think their financial problems are rooted in their lack of income. You’ll hear things like, “Well, yeah…if I made $175,000 per year, I’d be able to save and invest, too!” But is this true?
While, yes, having a higher income certainly makes the path to winning with money appear easier, the reality is that you’re still the same person, whether you’re making $37,000 or $175,000. You still have the same tendencies, weaknesses, and crutches.
There are people on food stamps who are broke and there are millionaires who are broke (living paycheck to paycheck). It’s not as simple as saying it’s a salary problem. It’s ultimately a self-control problem.
If you can learn to be disciplined with how you manage your finances, you will thrive. It might take you longer to win than someone who is disciplined and has a much higher income, but you’ll get there. (And when your income finally does grow, exponential amplification will follow.)
The question is, how can you strengthen your financial self-control so that you’re in a position to win with money? And here are a few suggestions:
1. Get Educated
The first step is to get educated on what it means to practice financial self-control and make smart decisions. Most of us aren’t educated in a school system (or raised by parents) where financial topics are taught.
Learn the basics of money from a variety of sources; meld all of this together to form a quick, impromptu degree in personal finance. Books, YouTube videos, blogs, webinars, and conversations with friends and family who are further ahead on their financial journey can all prove helpful.
2. Create Visibility
Lack of visibility into finances is another major issue. If you’re like millions of Americans, you have no idea how much you make, how much you spend, or where your spending is going. You need better financial vision.
There are a number of ways to do this. One option is to bookmark all of your financial accounts, create a spreadsheet, and regularly track, analyze, and update a running report. Another option is to use a money saving app like Cleo, which keeps you accountable via an artificial intelligence platform that’s fun, conversational, and brutally honest. Find a method that works for you and stick with it!
3. Understand Needs vs. Wants
The confusion between needs and wants is one of the single biggest issues within the personal finance world. If you only do one thing after reading this article, it should be figuring out the difference between your needs and wants.
A need, at a very fundamental level, is something that you must have in order to be safe and healthy. This includes shelter, food, clothing, and basic medical care. And depending on your situation, you might also include a vehicle (plus fuel and insurance).
A want is anything that isn’t necessary. And the tricky part is that wants can often be disguised as needs. You need a house, but you want a 3,000-square-foot house. You need food, but you want to eat out five nights a week. You need clothing, but you don’t need a $200 pair of shoes. You need to visit the doctor when you’re sick, but you want to have some cosmetic surgery. You need a vehicle to drive to work, but you want a brand-new SUV.
This isn’t to say you can’t ever buy something you want, but you have to be careful. The first step is being aware of the difference between needs and wants. Then, with that in mind, you can create a financial game plan that prioritizes the needs and leaves room for a few reasonable wants.
4. Eliminate Low-Hanging Temptations
Your willpower is only so strong. If you’re constantly walking through the kitchen and there are warm chocolate chip cookies sitting on the counter, you’ll eventually grab one. And the same goes for low-hanging financial temptations. If the Amazon app is sitting in the middle of your home screen every time you open your phone, you’re eventually going to click it and start mindlessly shopping for things you don’t need.
Eliminate the low-hanging fruit in your life. Be honest with yourself about where you come up short and cut these problems off at the source. This is easier said than done, but is necessary for your financial growth.
Are You Ready to Win With Money?
Anyone can win with money. It doesn’t matter what your income is or what sort of financial history you have. While there are certainly factors that make it easier for some than others, it ultimately comes down to self-control.
Are you willing to implement the right habits and discipline yourself to follow proven frameworks and models over many months and years? If the answer to that question is “yes,” winning will become a natural byproduct of your lifestyle.