New year, new budget

The start of the year is a good time to review financial trends, establish goals, and make choices that will help you have some financial discipline. This financial discipline—how you spend and save—will help you achieve long-term monetary goals. Often, that means prioritizing a larger, long-term reward over an enticing, but smaller, short-term benefit. For example, enjoying an extravagant dinner is fun for a few hours, but using that money to pay down your credit card may save you a lot in interest over the long run. And if one of your long-term goals is to be debt free, making a larger credit card payment now moves you closer to achieving that goal in the future.

Conforming spending and saving behavior to financial goals may come easier for some than others. But everyone can work on honing this skill. Researchers have found that certain strategies can establish and improve the self-control needed to spend and save wisely.

Build the habit of self-discipline

Whatever your age, income, or life situation, these steps can help you lay the foundation for a disciplined approach to managing your money.

Assess your financial situation. To exercise financial discipline, you need to know where you stand currently. How in control of your finances do you feel? How prepared would you be if you were to face a financial setback or emergency? At this point, you may want to consider your future financial goals.

Develop a financial plan. Once you’ve assessed your situation, identify any areas in which your current actions don’t line up with your future goals. Then, think about what you could do to improve this alignment. Let’s say one of your goals is a secure retirement but you’re currently contributing little or nothing to your retirement account. You might draw up a budget that allocates more money for retirement savings—and less for clothes, gifts, or entertainment.

Set guidelines and rules for yourself. Setting guidelines for yourself is a prerequisite for financial discipline. You can’t follow your own rules if you don’t know what they are. Speak with a financial counselor if you need some help creating your financial plan.

Set target dates for goals. For example, you might set a goal to pay off your mortgage early. First, focus on a date instead of how many weeks, months, or years are left to go. Then, create a detailed plan outlining how much you will have to pay extra each month to pay it off by that date. Studies show that framing time this way is more conducive to long-term financial patience. 

Expand your knowledge. No matter how much or how little you know about money management, there’s always more to learn. Consider taking a class or webinar on investing or buying a home. You may leave with not only more information but newfound inspiration for avoiding impulsive choices.

Manage your emotions. Do you make impulse purchases when you’re feeling stressed or depressed? If your emotions rule your wallet, you may have an increased likelihood of spending more than you intended or making regrettable purchases. Pay attention to your emotional triggers for spending. Then, develop strategies for handling them in a less costly way.

Bolster your financial willpower

Financial discipline is like any skill: You can improve it through practice. These tips can help strengthen your self-control with money.

Keep close tabs on spending. Make a habit of recording and reviewing what you spend each day. Use a notebook or money-management app and compare what you’ve spent to what you have budgeted. Research shows that self-control is more likely to falter when you lose track of your behavior. 

Don’t overtax your self-control. Studies show that trying to make too many choices at once can deplete your willpower. When that happens, you’re prone to hasty, ill-advised decisions. To avoid this, pace your financial decision making as much as you can. Prioritize your goals and focus on the one or two most important goals. If you start feeling overwhelmed, take a break and do something else for a while, but set a time and date to go back and make those pending decisions. Give your willpower a chance to recover.

Remove the element of choice. Another way to give your willpower a break is by reducing the number of choices you need to make. Set up automatic contributions to your savings and investment accounts. 

Focus on dreams for the future

The ability to focus on your future is important for prioritizing long-term goals. Take a few minutes to visualize what your future will look like.

Imagine yourself at different points in time—two or five or 20 years from now. Then remind yourself that the choices you make today influence where you will be at those times. It’s easier to stick to the plan when you think of financial discipline not as depriving yourself today but as giving yourself the future you want. 

Source: Lifeworks

If you need additional support with managing debt and mental health, take advantage of Dallas ISD’s Employee Assistance Program (EAP) by LifeWorks, which is free for employees, 100 percent confidential, and available to all employees and their dependents. 

Sessions through the EAP are available by phone, virtual, and in person. Employees can also find tips, articles, self-assessments, and topical features focusing on specific EAP resources available through the EAP smart App.

To start on your wellness journey please visit or reach out to the EAP by calling 972-925-4000 and selecting option 3 for EAP.

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