How to Develop Financial Discipline and Retire Early
What is Financial Discipline
Financial discipline means managing your savings and spending in conformity with the goals that you have set. Depending on the plan that you have, whether it is buying a house, education, or early retirement, you have to make a budget and start saving from an early age. We live in an age of conspicuous lifestyles and it is very difficult to maintain financial discipline. But if our goal is to be financially stable, we need to curb the urge to spend on things that we have not planned on in our budget. We should practice living within our means or under our means and saving a maximum part of our earnings and invest smartly, to achieve financial stability in later life.
Tips to Achieve financial discipline
- Unnecessary spending: Don’t spend on things you don’t need. Avoid going to discount sales because we end up buying things we don’t need most of the time at these sales. Buy only what you need.
- Minimalist Living: Millennials today are going for minimalistic living with a goal of retiring early or buying a house. They try to lead a simpler, uncluttered life and save big time.
- Set up your financial goals: Set up goals on the amount of money you want to save over a particular period of time and for what purpose.
- Automatic transfers: Enable automatic transfers from the primary account to deposit or saving accounts every month so that you may not be tempted to skip the payment.
- Budgeting: Create a budget of the income the expenses that you may incur and the amount you can save. Be realistic and start with small amounts and recognize the areas you can save in.
- Buy wholesale: Buying wholesale can cut costs as there would be quite a difference in the wholesale and retail prices. Make a list of all the items that you need for the particular month and purchase them from a wholesale store.
- Transportation: Take public transport than your own vehicle as you can save a lot of fuel in the long run. Walking small distances is a good idea as it is good for your health and saves the fare too.
- Unsubscribe emails and notifications: emails and advertisements from marketers may tempt you to buy something that you really don’t need. So it is best not to subscribe to such emails and notifications.
- Avoid medical bills: By avoiding unhealthy lifestyles like not exercising, eating junk food, addictions to alcohol, cigarettes, and other substances you can save on the medical expenses on account of lifestyle diseases.
- Visualize your financial goals: By visualizing yourself achieving your financial goals, and following good financial principles you can envision a stable future that motivates you to save more.
- Avoid using a credit card: It is very easy to spend unnecessarily using a credit card, as we don’t have to pay immediately. A debit card is better as you will have to spend only the amount that you have in your account.
- Always upgrade your skills and learn new things: Upgrading your skills and learning new things related to your profession will help boost your career and enable you to progress upwards in your career and earn more.
- Save in systematic investment plans: Long term systematic investment plans earn well. Even small amounts, when saved for long periods, can yield good returns.
- Learn on financial matters: with free courses and free e-books. There are a lot of on-line courses which can help you learn a lot.
- Avoid status symbols: People waste a lot of money for maintaining their status and look well off like a big car, costly watch, and costly, branded clothes that cause a huge dent in your earnings. By avoiding these you can save a lot.
Habits to Build Financial Discipline
- Write down your thoughts on long term goals of building wealth: It helps with clarity on the strategies needed and direction you plan.
- Utilize free time constructively: During the time that you get on weekends, after work, focus on building skills instead of consuming content. Practice reading a book instead of watching TV. Limit spending time on social media and do something constructive and useful.
- Take a step back and focus on life goals: Going on long walks helps to clear the cobwebs in the brain.
- Fill out a calendar with things to be done: Stick to a routine, time to wake up, time to spend with family, time to work. Meditate, or exercise to clear your mind.
Networking to succeed: Connect with people who are driven to achieve goals and found success with their hard work. Take tips from people with financial discipline.
- Make resolutions to achieve your financial goals: By making them a part of your discipline goals you can ensure that you follow them.
- For more tips on building discipline, follow my hub: https://hubpages.com/health/How-To-Be-More-Disciplined-In-Life
"Do Not Save What is Left After Spending But Spend What is Left After Saving"
Nowadays the Millennials plan for early retirement. The advantages of early retirement are you get to enjoy life and live your dreams while still young and healthy. You can travel around the globe and pursue your passions without the fear of expenses. For this, you need to build up a retirement corpus so that you can live comfortably and with the same standard that you used to when you had a steady income, at the same time have a surplus to be able to travel and enjoy life the way you had planned. So here are some tips to save for your early retirement:
Tips to Save for your Retirement fund
- Plan the savings and investment goals early, right after you start earning.
- Keep a track of your financial goals and monitor the progress.
- Live below your means and save as much as you can.
- Living near the workplace and in areas that cost less can help save a lot.
- Calculate the expenses and check the areas where you can reduce the expenditure.
- Invest the savings every month in Stocks, bonds, retirement accounts and real estate that yield income.
- Avoid eating out and going to parties as they can affect your health and cost you a lot in medical bills.
- Try out parallel jobs like consulting and coaching to enhance your income.
- Take the help of a financial advisor if necessary.
- Do not touch the accounts meant for retirement savings. Early withdrawal can lead to heavy loss.
- Have a back-up plan of self-employment options or other business schemes so that it will provide secure income in case the retirement savings are not sufficient and also to keep you occupied in the spare time.
The tendency of youngsters is to spend all the money they earn and enjoy life now. But given the uncertainty of life, we may not get the chance to enjoy and live our dreams being stuck in the daily grind of life. If invested properly money can grow and help in the long run than if you spend it. So with proper planning, frugal living, saving and investing wisely from an early age, the millennials can plan early retirement and enjoy life and live their dreams when they are still young and healthy.
Do You Think Early Retirement is a Good Option
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 VIDYA D SAGAR