Disciplined spending can strike fear into the hearts of those who like to be able to buy what they want when they want it. However, for those on a strict budget, some form of control over their spending habits is needed. Most people will only be able to see the advantages of disciplined spending; nevertheless, there are a number of cons as well.
Pros
Spending is under control: It is so easy to get into the habit of overspending, simply because you don’t keep track of what is going where. Once you start a disciplined spending habit, you will be forced to budget your money in advance and make a note of everything that you buy. As a result, you are much less likely to have a surprise at the end of the month because an unexpected bill comes in – you should have already prepared for it in advance.
Assists in lifestyle re-evaluation: It may be that economic circumstances dictate that you need to re-evaluate your lifestyle. When you are undisciplined in your spending, you may not really understand where you need to make changes. However, by disciplining yourself and setting out all your incoming and outgoing funds, you should be able to make smart decisions about where you can cut costs. If necessary, you may need to downsize your living arrangements to cut down on your mortgage or rent payments.
Allows for an emergency fund: Unfortunately, emergencies do happen. If you rarely have any money left at the end of the month – or, even worse, are in debt – you may find yourself unable to pay for costs resulting from the emergency. By being more disciplined with your spending, you can ensure that you have money put aside that you can rely on when necessary. And, of course, if you don’t need the money, you can always add it to your savings.
Any debts laid to rest: If you are overly relaxed about your spending habits, you probably find yourself in debt on a regular basis. By taking control of your budget, you will be able to ensure that you don’t get into any further debt and that you at least start to be able to pay back what you owe. This will give you enormous peace of mind one you have straightened yourself out and you can start to plan for your family’s financial future.
Cons
Goals set too high: The whole point of disciplined spending is that you keep within your budget. However, if your budget is so tight that you cannot live comfortably within it, then you aren’t going to be able to achieve your goals. This can lead to frustration and possibly even panic, which isn’t going to do you or your family any good. Try to ensure that the goals you set are achievable and revisit them on a regular basis. Being too rigid is not advantageous.
Obsession: Disciplined spending has many advantages, but there is a risk that you will take it too far if you are not careful. Worrying about every penny that you spend can become addictive. This can lead to unhappiness, stress and even depression every time you over-spend a little. Disciplined spending should ideally mean keeping an eye on your spending and making cuts where it is viable, without letting it become something that takes over your life.
Pressure and worry for family members: If you are in charge of the budget and don’t explain it in a comprehensible way, family members may find it very hard to accept the change in lifestyle. You may feel that children don’t need to know the ins and outs of your financial situation, but they do need to know why cuts are being made and why they can’t have everything they want. On the other hand, you don’t want to frighten them into feeling that they can’t do anything for fear of messing up your budget.
Potential ill health: Obsession about over-spending can lead to depression, but there are other potential effects on your health if you are not careful. Some spending on regular medical, dental and eye health is vital to avoid problems down the line. An over-reliance on cheap, but high-fat and high-sodium foods can also have a detrimental effect on health. Finally, cutting costs on gym membership and other forms of exercise is fine, so long as it is replaced by exercise with fewer costs attached, rather than replacing it with evenings lounging on the sofa.
Disciplined spending is generally a good thing, but make sure you also look at the pitfalls so that you don’t take things too far and make yourself, and your family, miserable as a result.