There’s a great irony when it comes to financial freedom.
It’s most evident anytime an article about saving money, building wealth, and the financial independence movement goes mainstream.
The reality is that the people with the least financial discipline often feel the most weighed down and restricted by money, while those who are willing to restrict themselves, living on less, usually feel the most free.
The truth is, the more discipline someone has, the more likely they actually experience freedom
Read the comments section of any mainstream article on the FIRE movement and the common refrain you’ll see is, “How could anyone live like this?”
I get why people might think that people who live on less and restrict their spending are living less quality and less enjoyable lives. And many of those stories are written to drive clicks and create controversy. But the reality is that those who are willing to make these lifestyle changes experience the most freedom.
What many of these people fail to see is that by living on less, lowering your expenses, if you willingly restrict yourself, it actually opens up more opportunity and freedom.
The principle is this: the more you limit yourself, the more freedom you create.
Consider some other examples in life…
Time: Those who fill their schedules to the brim feel like life is chaotic and out of their control. Those who say no to opportunities to fill their time, have more time to spend as they please.
Diet: If you eat unhealthy most of the time, you have no room in your diet to enjoy more. If you manage to eat healthy 80% of the time, you can allow yourself to eat whatever you enjoy the other 20% without worrying about it.
The key to pursuing discipline the right way is to identify and remove the things that aren’t contributing value to your life.
When it comes to money, the key to creating financial freedom is to be disciplined with your finances by reducing non-value add spending.
7 Ways Financial Discipline Creates Financial Freedom
- 7 Ways Financial Discipline Creates Financial Freedom
- 1. Debt Freedom
- 2. Ability to give to people and causes
- 3. Margin for unexpected spending
- 4. Taking risks in career or life
- 5. Can self-fund a side business
- 6. Travel
- 7. Leads to financial independence & financial security
- How to Build up Financial Discipline
- Bringing it all Together: Chase Financial Freedom
1. Debt Freedom
One of the greatest freedoms of being disciplined with money is the ability to be debt free. There are few things that can be more overwhelming, anxiety producing, and stressful than debt. It can ruin marriages, lead to suicide, and create a host of stress-induced health problems.
I love reading stories about people who have paid off a large amount of debt because the journey to becoming debt-free is SO MUCH MORE than just dollars and saving interest. There is a huge sense of personal accomplishment and relief that happens when you are debt free.
But it’s not easy.
The journey to becoming debt free is hard, especially if you’re loaded down with student loans. It will take sacrifices, hard work, and a whole lot of saying “No.”
If you’re willing to do the hard work in being disciplined with your finances, then one day you’ll get to experience the great freedom of being debt free (or at least free of consumer debt!).
2. Ability to give to people and causes
One of the greatest advantages of our financial discipline is the freedom we have in our budget to give and to do so generously to the causes and people we care about.
I still remember the day this hit me so clearly.
A college friend had just finished a two year long residency program where he was training and equipping people to serve as long-term missionaries. He was personally feeling called to go to the nations for the gospel and was raising support.
He was two minutes into his support pitch when I interrupted him to tell him that we’d love to support him. I asked how much he needed and we were able to meet it without a second thought.
This never would have been possible if we were still struggling to save each month.
The discipline we have with our finances doesn’t restrict us, but rather is has freed us to support missionaries, our church, and families who are trying to adopt.
This is why I’m so passionate about helping people figure out how to budget and save money!
My mission on this blog is to help people lay their own financial foundation, plan for the future, and also make an impact on others with their giving.
3. Margin for unexpected spending
There’s no question that everyone should have an emergency fund to protect themselves from unexpected spending that comes up. The reality though is that far too many are in financially weak positions. They have no savings. They have no back-up. They have no emergency fund.
I don’t know about you but that sounds stressful.
If you are able to build up some discipline with your finances and create a monthly surplus, then you’ll have margin in your budget for unexpected spending.
I don’t know the stats but I’ve read dozens of stories of people who are living in constant fear and live with anxiety over the instability of their finances. Going through life that way can be crushing.
4. Taking risks in career or life
One of my favorite things about the personal finance blogging world is the amount of people who have taken bold steps to leave behind jobs they hated to pursue making a career out of what they love.
More than that though, I hate seeing people who are stuck in jobs they hate but can’t leave because they are so close to financial ruin.
If you can take steps to lower your spending, become debt free, and build up an emergency fund, then you’ll be in much better position to take risks in your career!
5. Can self-fund a side business
The other great thing about having some freedom in your budget is that you can self-fund a side business or side hustle. Nearly every business you want to launch will have some start-up costs. If you have an idea to start something, but money is holding you back, then one way to get there is to cut your costs
Most people think about frugality as a great way to save more money each month to invest in the stock market. And it is! Everyone should do this. You can get solid 7-10% average returns and let compound returns grow your net worth.
But frugality can also help you launch your own business which could yield returns far higher than 7-10%.
If you can be financially disciplined to say no to unnecessary spending and lifestyle inflation, then you can use that extra money to start building a future source of income that you have control over.
If you’ve spent any time in the gym, especially in strength training circles, you’ve probably heard the infamous quote by Ronnie Coleman…
“Everybody wants to be a bodybuilder, but nobody wants to lift no heavy ass weights.”
If you’ve got goals or desires, then you’ve got to put the work in to get there!
The truth is, everyone wants to be financially secure, taken care of in retirement, yet they don’t want to do the work to get there.
Everyone I know would love to be able to travel more, but they are unwilling to make the necessary cuts to their budget to free up the money to travel. The people who are willing to be financially disciplined can create the freedom in their finances to travel.
7. Leads to financial independence & financial security
What I love about the financial independence movement is the amount of people who are taking control of their finances to improve their financial future. The most important underlying mindset is that sacrifice now leads to greater reward later on.
The people most willing to restrain themselves by living on less end up being able to live the most free. The more disciplined you are with your money, the more secure you’ll become with your finances.
Would you rather…
- Be living paycheck to paycheck, weighed down by debt, and constantly worried about your long-term future? Or…
- Be debt free, secure in your retirement planning, with a decent surplus every month?
The answer is obvious!
Don’t get me wrong… There are plenty of lower-income earners who have made tough sacrifices, are working hard, and are still living in situation #1. If that’s you, then I just want to encourage you to keep pushing ahead. Keep doing the best you can to pay off your debt and keep working to increase your income.
How to Build up Financial Discipline
This following tips are helpful to everyone, but I’m writing them for the people out there who are making well above the median income but consider themselves broke. I’m writing this for the people who make decent money yet are still stuck in the paycheck to paycheck cycle.
1. Make a Budget
Look, I get it.
You know that a budget would help, but you just don’t want to do the work.
It’s boring. Hard. And you’d rather spend your time doing any one of a million other things.
If your finances are out of control though, then I don’t give a crap about what you’d rather be doing.
You need to take control and that happens by putting in the hard work and making a budget.
I’m not saying you have to do this forever, but to get disciplined with your money, you need to for at least a few months.
I promise you, that if you have never budgeted before or tracked your spending then there are holes in your boat leaking out hard earned money every single month. You can’t identify what these things are until you take the time to track your spending.
You need to make a budget. You need to watch your spending and you need to see where your weakspots are.
I wrote a massive guide on how to budget just last week and I promise you that it will help you get your financial life in order. How am I so confident? Because I’ve sat across from people in real life and walked them through these exact steps.
2. Cutting costs
After you’ve got a baseline budget in place, you probably need to start cutting costs to build up as much of a monthly surplus as possible. The bigger of a gap you can create between your income and your expenses, the more freedom you’ll be able to “buy” each month.
The easiest place to start is by finding ways to reduce your spending on the big 3:
If you can get those under control, then you don’t need to find every possible way to save a buck.
That being said… I do have a massive guide of a 150 proven ways to save money! It’ll list out nearly every way to save money that is actually worth your time and effort.
3. Saying no to consumption & materialism frees you from the need for more
If you want to build up your financial discipline, then you have to learn the ability to say no–to yourself and occasionally to others.
You have to recognize that the actions you’re taking today, the sacrifices you’re making are all for a reason. You’re taking control of your finances to create your own secure future. Every time you say no, that’s what you are building towards.
As you start to build up the discipline to say no, you’ll realize that the strength to do so will actually free you from the need for more. The less stuff you own, the less stuff you have to buy, fix, upgrade, or someday replace.
Every time you say no, you are creating financial discipline that will lead to financial freedom.
One of the best ways to stick to any plan, new habit, or reach your goals is to have accountability. Having a partner, team, or people you can fall back on for support and encouragement is such a help to pushing forward in life.
I’m lucky and grateful that my wife and I are finally at the point where we have similar goals with our finances. We know where we want to be and what it takes to get there.
We’re able to hold each other accountable to our plan, encourage good habits for saving money, and help each other say no when needed.
5. Develop good habits that curb your bad habits
One of the best ways to work through bad habits is by developing good habits that counteract. One of the biggest money-sucks on anyone’s budget is convenience or a lack of time. We eat out, buy coffee, pay to get our lawn mowed all to save time.
But what if you were able to counteract these bad habits with good ones?
Personally, we LOVE eating out and we do it way too often. We usually do it when we are short on time or don’t have food at home.
Thanks to meal prepping though, we’ve been able to eliminate our two biggest excuses. Now, we eat out when we want to, not because we feel like we need to.
If you know you have bad money habits, then you need to create some good ones.
- Pay off all credit cards every month
- Set-up automatic transfers for savings accounts
- Create a 24 hour rule before buying anything over $100
The point here though is to focus on creating good habits rather than avoiding bad ones.
6. Develop a Long-term mindset
If you really want to build up your financial discipline, you need to develop a long-term mindset.
Growing your net worth doesn’t happen in a month or even a year.
It is the compounding of hundreds of daily and weekly decisions that add up over time.
The more you can adopt a long-term mindset, the more focus and discipline you’ll have in each of those small daily decisions.
“Rome wasn’t built in a day, but they were laying bricks every hour.”
James Clear talks about this idea of laying bricks every hour and how small decisions and daily systems can add up to huge results over time.
Stop looking for ways to get rich quick and focus on setting up a system for your finances that can reproduce results every single month–without you doing anything different.
Once you’ve got your system in place for automating savings, paying down debt, and saving for all of your financial goals, then find ways to improve them bit by bit.
The early days of building wealth are like a slog. The numbers move up slowly and it can seem like it will take a lifetime to reach your savings goals. But then compound returns really start to add up. Eventually you hit a point where your investment growth each month will be more than the amount you are adding in.
That’s when your pile of money really starts to stack up.
The more disciplined you can be in your early years of wealth-building, the quicker you’ll find financial freedom. A long-term mindset is key to getting through these early years.
Bringing it all Together: Chase Financial Freedom
If your want to live a life of financial freedom then you need to become disciplined with your money.
The more disciplined you can become, the quicker you’ll start to feel a sense of freedom with your finances: to get out of debt, to give to others, to not worry about unexpected spending, and to be financially stable.
I want this life for you. No longer worrying about stretching your dollar to the end of the month. No longer living life with anxiety because of money.
Build financial discipline. Create financial freedom.