Are you Disciplined with your Money?
Maintaining discipline when it comes to your money is often the driver of financial success. According to the authors of The Next Millionare Nextdoor what it takes to become wealthy today is “the consistent exercise of certain behaviors that have been shown to relate to financial success. Millionaires continue to demonstrate a disciplined approach to their finances, allowing them, over time, to transform income into wealth.”
Some key behaviors and tips to maintain financial discipline and wellbeing are:
- Become very clear on your why when setting financial goals. It is easier to stick to a plan when you have a clear vision.
- Spend less than you earn. This is a simple concept but can be very hard with today’s social media and convenience.
- Avoid storing your credit card(s) at various merchants, or with other technology. That convenience alone can make it harder to stay disciplined with your spending.
- Time is your best friend when it comes to saving and investing due to compounding interest. Start early and increase amounts as you earn more.
- Gain investment knowledge but try to avoid too much financial commentary. Cable shows and financial publications make their money with viewers, headlines and shares, so they are always trying to come up with something catchy, scary, or exciting.
- Focus on the long term when it comes to your investments. Long term investing can be quite boring, but effective.
Investing requires accepting some amount of uncertainty, but it also requires staying cool even when markets seem to be in flux. To understand your investing mindset and discipline, take this ASSESSMENT on investor composure. These questions are designed to capture your personality as it relates to changes in financial markets, the value of your investments, and personal financial goals.