The Role of Discipline in Your Financial Plan

The Role of Discipline in  Your Financial PlanAll discipline for the moment seems not to be joyful, but sorrowful; yet to those who have been trained by it, afterwards it yields the peaceful fruit of righteousness.
Hebrews 12:11 (NASB)

The Scripture verse above highlights the word discipline. So what’s discipline?

In looking at a couple of dictionary definitions, you can see that discipline can be defined as the ability to keep working at something that is difficult.

Another definition states that discipline is an activity that is done regularly as a way of training yourself to do something or to improve your behavior.

So the notion both from the Bible and from the secular definitions is that, discipline involves hard work, dealing with a difficult situation, on a regular basis, for a period of time, with the ultimate reward of improving your current situation.

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Discipline in Your Financial Plan

Discipline enables you to:

  • Prepare and work on your budget every month because you know that’s how you can control your money.
  • Keep track of your expenses so you can manage your money.
  • Stay consistent with your debt snowball and avoid falling for the traps of debt consolidation and credit repair scams. You know there is no quick fix.
  • Wait and you don’t buy a house until you are ready. You are immune to house fever.
  • Learn to save and wait to pay cash for what you really want. You don’t live just for the thrill of the moment.
  • You don’t panic with the ups and downs of the stock market. You stay on track with your investing strategy.

If you are in bad shape with your finances, realize that you did not get here overnight. But also realize that you can turn things around starting today.

Your Challenge

You can make the decision to get on different plan that gives you and your family hope for the future. But wishing for a different outcome is only part of the equation.

You need a plan and you need to act on your plan with urgency and discipline. If you need help, I can coach you through the process.

Don’t wait any longer. The time is now and the only person that can change your financial plan is you. Let’s get going!

Question: What other examples can you share about applying discipline in your financial plan?

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$500 Monthly Car Payment or $500 Car Repair Bill?

$500 Monthly Car Payment vs. $500 Car Repair BillSubscribe to future posts from Figueroa Financial by e-mail

I have thought about this question a lot recently. You see, my car is a 2003 Ford Escape (great picture, right?) and I have owned it for 10 years.

My wife and I finished paying it off in October of 2007 in the midst of our debt snowball.

But you know with cars, something is always up; especially as they get older they tend to breakdown more.

My car has around 180,000 miles on it and the latest repair cost me about $500, which is about the same amount of a monthly car payment.

So here is the question for many people: as a car gets older and repairs are more frequent, do you breakdown and get a newer car with a monthly payment?

Or do you rely on your savings (emergency fund/car maintenance fund) to keep up with the occasional repairs?

I have to tell you, getting a newer car would be nice (here is the one I would like). But I am committed to a debt-free life style.

We have not had any consumer debt since February of 2008 and I intend to keep it that way. A monthly car payment is not an option for me.

We are working on paying off the house to eliminate our last debt. My goal is to finish paying it off by my 50th birthday (I just turned 46 in case you were wondering). And my goal is to pay off the house before I upgrade my car.

So I will continue dealing with maintenance and repairs. It’s not fun to pay them, but it is better than paying interest on an auto loan. A new car would be great, but a monthly car payment would get in the way of my greater goal of paying off the house.

So what about you? What are you willing to do to eliminate debt from your life once and for all?

  • Are you willing to stop borrowing money? You can’t borrow your way out of debt. Raising your debt ceiling won’t cut it.
  • Are you willing to live on a budget and spend only to the level of your income? You can’t keep relying on the banks to catch your slack. At some point, you will be too much of a risk.
  • Are you willing to make the tough decisions and cut down on those items that are not basic needs? It will be painful and unpleasant, but necessary. Someone in your family will complain. Will you deal with it?
  • Are you willing to sacrifice to generate additional income to accelerate your debt elimination?

Remember, you are the solution to your money problems. It’s your life, it’s your money, and it’s your decision on what happens with your finances.

What’s your decision?

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Redeem the Time: Make 2013 Your Best Financial Year Ever

Sand Glass (Redeem the Time)Subscribe to future posts from Figueroa Financial by e-mail

Can you believe half of 2013 is gone already? Last week at work I had my midyear assessment, and it was a good time to review how my team and I had performed against our objectives for this year. In summary, we are doing well but we can do better.

In addition to my work objectives, I had set personal goals, and goals for Figueroa Financial for 2013.

This past weekend I had the blessing of a long break thanks to the 4th of July Holiday, so I took the opportunity to evaluate how I am doing against those goals. In some cases, I met or exceeded my goals, and in some cases I came up short.

But the important thing is that I took time to stop, do the review, and see how things are going. I know where I am and I know what I need to do for the rest of this year.

You can follow the same process with your money. Did you set some goals back in January for your finances? How are you doing?

I don’t want you to get discouraged if you are not doing as well as you wanted. You still have half of 2013 in front of you. You can still redeem the time and make 2013 the best year for your finances. It’s time to review, reflect, and reset the plan for your money.

Review

What goals have you achieved this year? How are you doing with your monthly budget? Have you completed your beginner’s emergency fund? Did you finish paying some of the debts on your debt snowball?

As you review your results, take a moment to celebrate. Every step you take in the direction of financial wellness is a step in the right direction.

Every victory counts in your battle to get control of your money, so don’t forget to celebrate when you win!

Reflect

As you review your results, there is the danger that you might get discouraged if you are not careful. To avoid that, I want you to do 2 things.

First, I want you to first think about how far you have come since you began. If you have made changes to the way you handle money, you are making progress.  Don’t forget that you are not where you used to be.

Second, try to focus on why you are working hard to get control of your money. Maybe you were tired of living paycheck to paycheck. Maybe you got sick and tired of carrying the debt burden. Perhaps you wanted to change the legacy for your family and leave a great inheritance to your children and their children.

Remembering the “why” will empower you and keep you going even when things get difficult.

Reset

As you look at your results, you might need to reset your strategy. Think about what worked well for you and think about what could have gone better.

Be honest and remember that this is a process, and that implies that it takes time to get it under control

Are there any categories where you can reduce your spending? For example:

  • If you had trouble with certain categories like groceries or restaurants, you might want to start using a cash envelope.
  • Could you get a better cell phone or internet service deal?
  • How about exploring options for reducing your insurance expenses?
  • Or could you reduce your recreation/entertainment expenses by choosing cheaper alternatives?

And what could you do to increase your income? For instance:

  • Is it time to pick up more hours at work?
  • Could you pick up a part time job or do some freelance work?

Your goal is to improve your cash flow by reducing your expenses and increasing your income. Every little improvement can help you to balance your budget and give you great traction.

“All we have to decide is what to do with the time that is given to us.”
J. R. R. Tolkien (The Fellowship of the Ring)

Please leave me a comment and let me know about your financial plans for the last 6 months of 2013.

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