The Importance of Financial Discipline

By: Paul Ebanks, Branch Manager- Mandeville Posted:

Financial discipline is defined as your ability to tailor your spending and saving to the plans you have set to achieve your monetary goals. Wealth creation refers to the creation and building of a stable source of income until you eradicate the never-ending struggle to make ends meet. The ability to discipline yourself to delay gratification in the short term to enjoy greater rewards in the long term is the indispensable prerequisite for success.

The question is, “how can we get to this level relatively quickly and sustain it indefinitely?” The answer is surprisingly straightforward. By following these steps, one should be on the right track to financial freedom. According to Forbes magazine, there are 8 steps:

  1. Create a spending plan.
  2. Spend wisely.
  3. Pay off high-interest debt.
  4. Create an Emergency Fund.
  5. Earn more money.
  6. Protect your assets with insurance.
  7. Implement and adjust as needed.

A spending plan is necessary to keep one’s budget in line. Spending wisely involves avoiding unnecessary expenses and ensuring very little waste on a monthly basis. Credit card and loan interest rates tend to be very high and these expensive loans need to be reduced and eradicated preferably before funds are tied up into other medium and long-term ventures. An emergency fund should be kept facilitating the smaller unexpected eventualities that come up. Most persons are taught to have a scarcity mindset of sacrificing all pleasures and live miserably to build wealth. However, earning more money is a viable option. Learn new skills, start a money-generating hobby, acquire additional training and any higher education that increases your marketability equating to better salaries and a better workforce if you own your own business.

Investing sensibly based on your risk tolerance, time, available funds and expected returns takes the most effort as finding the discipline to delay gratification is important in this step. Proven Investments Ltd. has a wide range of new and existing products along with expert guidance to get you through this phase. Home, auto, critical illness, liability and health insurance are vital to ensure that all your assets are not depleted in one or several unfortunate events. Finally, just as life is unpredictable and ever-changing, our wealth accumulation plans must be adjusted to fit our changing circumstances accordingly. Our advisors will proactively see to these adjustments during portfolio reviews.

Building generational wealth rather than just living a day at a time is the key to financial happiness. We are committed to getting you to that point.