Everybody tells you that true happiness has nothing to do with your bank account. Now, I have been on both sides of the scale and can confirm that money per se doesn’t make you automatically happy but just only buys you things. Question is “do things make you happy?” My personal answer to this is clearly NO. Things do not make you happy. But you need a blanket of security to stop worry and live your life and pursue experiences that create a happier you . Ergo money matters! One of my main objectives of my personal development is to focus on growth and expansion. I made my goal here to grow financially 4% over the inflation rate p.a. ( I think on a lifespan scale this is healthy and also achievable. Just as a small inside information, Norwegian state has the same objective, we all know it works for them!
In order to achieve my goal I need to have discipline to follow the path there.
Here is how you should practice financial self discipline
- define your status quo, this simply means look at all your financial resources ( bank accounts, mortgage, credit cards insurance etc)
- define your short-, mid- and long term goal ( example to buy a family home in particular area or pay for education of your children etc)
- understand money, this is important. Most people do not learn and expand their knowledge about investing and money in general. Make a habit of reading about money on daily basis!
- understand your needs . Make a budget and don’t forget to include your guilty pleasures (aka FUN STUFF) into your budget
- Check your financial progress regularly min. 1* month. This includes your bank statements ( to see if you have been following your budget) and your investments. If things are not going the desired way restructure and rethink.
As stated before my personal goal is to grow my wealth by 4% above inflation on yearly basis. On some investments this means that you can’t measure it annually but on average for a longer period of time. As example, I have bought a flat and I am living it. I have paid in cash so I do not have financing drainage on this investment,but money left my bank account and profit is not realized yet ( this would be if I would sell it, minus the tax). So how do I value on paper my financial growth here? The calculation would be following, how much rent would I have to pay for similar property in same area over 1 year. This amount would be gone for ever with no benefit for me. Never forget money comes to money. You have to make your money work one way or another.
do or do not there is no try 