Financial discipline is one of the most important but most ignored skills that one can acquire. It is essential because it allows you to avoid financial mistakes that will have you knees deep in debt or not being able to make ends meet.
It is easier to navigate the financial complexities of life when you practice financial discipline because it allows you to be better prepared for uncertainties further down the road. This is why it is crucial that you develop financial discipline and also teach your children so that they will also have a robust financial compass when they grow up. Here are essential tips to consider.
Budgeting is arguably the most critical aspect of financial discipline. List your expenses, especially from the most critical ones to the more mundane ones. For example, you should classify your house rent or car payment and credit card debt as the more weighty expenses alongside food and other basic needs. A budget will allow you to keep track of your spending and also to allocate your spending more wisely.
Teach budgeting to your kids if they are at a level where they can understand. Teenagers are particularly good candidates because they have phones and access to apps which they can use for budgeting purposes.
Putting some cash aside is always a great idea because it helps you prepare for uncertainties in the future. It is a way of ensuring that you never find yourself in a situation where you might have an urgent need for cash, but you do not have access. It is also one of the best habits you can teach your children from an early age through piggy banks. It teaches children the joy of saving and the patience that comes with it, especially if they have a goal that they wish to achieve.
Have fun with the process
If the process of financial discipline is fun, then you can easily make it a habit. One of the best approaches is to attach a reward to the financial discipline processes. Consider taking your children to the bank when you are depositing or withdrawing money so you can teach them about the processes involved.