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Abel Sanderson Banking Tips  —
Financially, discipline is about controlling your spending and making sure you pay for the things that need to be paid. The hardest part for most people is controlling their spending. If you cannot control your spending then no matter how much money you make it will never be enough.

The things that we want will always make us expend whatever income we get. Thus, controlling spending is a necessity for everyone.

It is being able to say no to purchases you normally make on a whim. These impulse purchases are the primary contributors to people not following their budget.

You can make a budgetary amount to account for impulse purchases but then make sure you do not go over that amount on a monthly basis.

Those who do not have a natural amount of discipline must acquire it the hard way. Acquiring it comes though practicing it in small amounts.

Saving money requires you to have the urge to resist spending. We often think we “must” when in truth there is no urgency other than that which we have created in our mind to justify something.

The starting point of financial discipline is the ability to restrain yourself through coming up with a budget and strictly adhering to it.

This is important because failure to adhere to your budget shows lack of discipline just like someone breaking his or her own rules.

A solid financial budget is key to the success of any financial plan. A budget may prioritise timely bill payments, saving up cash for big-ticket items and putting money aside to purchase investments.

For motivation to stay the course, your financial budget should begin with goal setting. From there, you can put together a budget that preserves enough cash flow to meet your goals

A budget allows you to tell your money where to go instead of wondering where it all went. Without this basic financial tool in place, you will not be able to effectively use the money you have worked so diligently to earn.

One of the greatest benefits of budgeting is being able to stop the morning routine of checking your bank account balance!

You should prepare a budget every month, and it should be completed before the month actually begins.

This systematic approach will allow you to review your financial performance over the previous month and make any adjustments necessary for the upcoming one. This will allow you to eliminate a lot of insanity from your life simply by preparing and living within a budget.

By preparing your budget before the month begins, it will provide you an opportunity to recognise upcoming financial challenges and implement steps to address each one.

For example, suppose your budget revealed a gap of $150 in the approaching month. Because you prepared a budget before the month begins, it provides you an opportunity to eliminate that amount of expenses in the budget or devise a way to produce an extra income to cover that shortfall or both.

However, without a budget, you are less likely to discover the $150 gap when you still have money. It highly likely that you will only realise it when your money has run out.

This would leave you with little option except putting the extras on a credit card borrowing from colleagues or using overdraft if you are allowed one by your bank.

You can eliminate a lot of insanity from your life simply by preparing and living by a budget. As you approach the end of each month, follow these two simple steps:

Firstly review your budget for the month you are completing ie what went well? What surprises did you encounter? What do you need to adjust for upcoming months?

Secondly, update your budget for the approaching month ie what items need to be included in this budget? Do you need to make any changes to existing budget expenses?

Remember it is important to prepare your budget before the beginning of the month. One important thing to note is that discipline is a skill that can be learned just like anything else.

Another corollary to this is that spending is a habit too. Thus a key part of financial success is learning the skill of discipline and breaking the habit of spending.

When you are able to accomplish both of these objectives then you will be well on your way to financial solvency and a well-managed portfolio.

So how does one go about learning these skills?

You simply learn by trying but there are tricks, which can help you along the way. It is important to understand that discipline is a skill that gets better with practice. That means that if you can just begin applying it in one area of your life soon what you learn will transfer to other areas of your life.

When you are able to be disciplined in every aspect of your life, the results will dramatically improve.

Sanderson Abel is an Economist. He writes in his capacity as Senior Economist for the Bankers Association of Zimbabwe. For your valuable feedback and comments related to this article, he can be contacted on [email protected] or on numbers 04-744686 and 0772463008