Here are a few of my tips on financial discipline. These tips are very practical tips that will free up some extra cash for you which you can then invest wisely in the stock markets or money market instruments. Financial discipline is easier said than done . It requires effort and constant struggle with ones habits to achieve financial discipline and alter your age old spending habits. Once you get into the new habits of frugal living you will definitely feel better seeing that extra money in the bank .



The first step that you take is preparing an estimated list of expenses and income for the year. The make sure that you list down each month what your expenditure is. That way it will help you estimate what your average monthly expenditure .It will also tell you if you are spending beyond your limits. This first step is very necessary as seeing something on paper will make you realize the extent of the problem. Also keep asking yourself questions as to where are the opportunities to cut costs.

Based on the calculation of expenditure versus income prepare a chart of what you will need for your retirement as well as other big ticket expenses like college education for your kids. That will make sure that you put away that much cash for those long term purposes. To put ways that cash make sure that you have an automatic withdrawal system from your salary account.

You should set up that automatic withdrawal into a separate account which is solely for long term investment purposes. Set up another automatic withdrawal for short term cash requirements. That way the money which you require for long term and short term investments is not in your account at all for you to spend. This system works if you do not touch the accounts where your cash is parked.

Next step and the last step is finding suitable vehicle for investment of your money in the money making instruments. For long term stock markets or mutual funds are the best bet. For short term the CDs or the money market mutual funds are the best. Again my advice here is that you research properly before making a slection of any of the instruments. There are many stock as well as mutual funds which can be in the category of bad or not so good. Hence due diligence is required on your part.