Financial Discipline – Your Key to Financial Success

The word financial discipline has 2 parts- Financial and Discipline, and both are you aware of separately but finds it very difficult to follow connected. Discipline by definition is the practice of training people to obey rules or a code of behavior  using punishment or motivation. All of us have experienced discipline in our life in one way or other.

Financial Discipline
Schooling lays foundation is one’s life.  And it is the place where we first experience discipline. To lay discipline in our studies there were a set of curriculum, set of rules, punishments and behavioral strategies to regulate children and adolescence to maintain order. We’ve experienced a defined standard of clothing, time keeping , social behavior etc. in school. The one who follows every rule with obedience and sincerity gets best student of the year award. Parent teacher meeting gets organised every month to review the kids’ progress and point out the gaps if any, so that all the stake holders remain on the same page and goal of kids’ betterment be achieved.

Discipline and habit

Discipline can be brought in through Punishment and motivation. You may scold or punish your kid to refrain him from doing something; also you may offer him some gift or anything of his liking to make him do something like getting good marks in exam etc. As the kids started growing old the former method starts losing its importance. Motivation plays a big role than punishment. Same way some people work hard in job, follow the code of conduct , rules and policies laid down by company, with the fear of losing job , which shows the reason of his discipline is Punishment. On the other side some people work hard with a view of getting promoted or earning appraisal next year and this is motivation. Getting up early for a morning walk might be sort of punishment for many but slowly when one starts feeling the improvement in his health it becomes a motivation and he starts enjoying it and generates more positive results. Many times discipline starts with punishment or we take it as punishment but when we become regular to that and find good results we get motivated to continue with it and later it becomes our habit.

What is financial discipline anyway?

Complete financial sector work in a defined and disciplined business strategy. They follow the rules and laws set out by regulators which keep a check on their work and financial discipline. And those who don’t follow the basic rules of borrowing, spending, investing …face situations like what kingfisher is facing today or what has been happened in the western countries.  We have our seniors /bosses who keep a watch on us for our work discipline. But in our personal financial life we are so mismanaged, that many times we find it difficult to go for a movie in the last days of month. We don’t take holistic view of our finances and what effect one decision is going to give on other. We come to know of our financially undisciplined behaviour when we get punished in the form of Loan rejection due to bad credit score or life Insurance rejection due to not filing proper income tax return etc.

Now you have two options. Either get the signals in the right sense and find out motivation in that punishment or close your eyes on your financial matters as you always do. Please understand that you just can’t blame on government, economy or employer for all those mistakes that you have or are committing. This is your financial life, make it or break it. Going forward your child will ask for a certain amount for his education, you will not be receiving regular pay checks after retirement,  Your employer or government will not be there to support your family in case something happens to you.  It’s high time to understand the responsibilities and show some financial discipline. As I said above that in starting you may have to compromise on many things like you could not be able to buy latest I phone or LED or may have to postpone your vacations …and thus you start taking it as punishment, but going forward the results will motivate you to continue and it will become your habit.

Financial Discipline

Smart TIPs to inculcate Financial discipline

  1. Prepare a monthly spending budget and stick to it.
  2. Invest with a goal. Goals give direction and help you in selecting right product.
  3. Avoid loans for your desires. Better do a financial planning check before going in for a big purchase.
  4. Invest monthly to become regularise in your savings and this will also help you maintain consistency.
  5. Motivate yourself by visualising the goals and the end result for which you are working for.
  6. Pamper yourself. Give yourself a party/vacation or whatever you feel like when you achieve your savings/spending target. But please make sure to do this provisioning in your monthly budget. After all your efforts should be properly rewarded.
  7. Penalise yourself if you stop your investments before target date or spend more than what you have budgeted for. Your penalty can be not having any dine out in that particular month.
  8. Be accountable to someone. Both spouses can keep a check on each other on the spending habits.
  9. Take help of financial planner where ever you require. They can be a good source of support.
  10. If your credit cards are bothering you and coming in the way of being disciplined …get rid of them.
  11. Take review of the situations after a set period.

Unfortunately we did not learn in school on how to be in financial discipline, thus you yourself has to find it out. There are a number of obstacles that stand in your way when it comes to financial discipline. Over time we haven’t practiced the basics and unfortunately that has led many of us being in debt, unprepared for retirement, with little to no emergency fund. Many of us aren’t even aware of what our debt really costs us. We don’t really know what our debt looks like, or think about how it affects our future. (Also read Financial planning case Study)

See, it’s all about giving a start.  In the words of Robin Sharma –New habits become old habits when you do them every day. So adopt one great new habit today. We only do challenging things if we can convince ourselves that the reward for doing these things is greater than the cost of doing them. I have read somewhere that psychologists say it takes 30 days to create a new habit. Getting up at 5 a.m to jog daily may be hard at first, but after 30 days it will become a routine. The same thing goes with the money.

So financial discipline is the only way to get financial success.


  1. A very nice article Manikaran. I liked the way you put it across. Yes you are right that we just can’t blame on government, economy or employer for all those mistakes that we have committed. I wonder if your kind of bloggers were there when I have started with my financial lives, it would have been totally different. Thanks for such insights.

  2. I’m 25 yrs old and I serve in armed forces. Till now i was thinking that I’m sacrificing and having a perfect financially disciplined life sir!! But this article has instilled a spark and I’m looking forward for more and better financial management in my life !! Thanks for this better future and petite beginning towards my financial disciplined life eye opener sir !!

  3. I am a runner & a fitness fanatic, when I started it was a mountain climb. Now I am a habitual runner I understand perfectly that if does not challenge you then it won’t change you. I have achieved physical fitness
    now is the time to achieve financial fitness through discipline. My eyes are wide opened I will win a marathon in my financial life. I am ready thanks

    Johannes Ngeno AKA Black dog

  4. An educative piece sir,we miss such lessons in high schools that would help us manage our real lives but this is an eye opener.
    Thank you so much

    • Management of spending means to organize your consumption (expenses). Always segregate your planned & non planned expenditures. Make a respective budget for both the categories. Try to spend on the basic necessities first. Try to comply with the budget.


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