An Accident That Changed My Life: Learnt About Discipline, The Key To Financial Stability

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In this article, we will try to learn why discipline is the key to financial stability and success. I have had a roller coaster ride in my financial journey and the first incident was more of a shock. But the discipline kept me in a better position always. It’s the “mool mantra” of Personal Finance. If your basics are covered and you know the basics of saving and investing, you just need a proper strategy with discipline to secure your future financially.

How things went

I started my career in BGVB Grameen Bank as a PO. Then I joined Indian Railways as a JE in 2016. I was doing my training at that time and unfortunately one day I had an accident on the way to my office. I was riding a bike and a person suddenly came in front of me and I wasn’t able to control myself. We both were injured, but thankfully it was a minor accident. We both went to hospital for first aid and we both were safe. In the evening, I was sitting with my wife and we saw that I have only ₹6000 in my account and that’s it. We were so scared. What if the accident was major and I had to go for a surgery? What if any of us gets hospitalized, how will I manage the expenses? Yes, I have railway facilities but still, why should I rely on that? I must be prepared for any kind of health emergency.

Now I started to think. I was working for a period of 1.5 years and I saved nothing. I mean ₹6000 is simply “zero”. But why? Why didn’t I think before? I thought about saving many times before. I was earning decently then, around 30K/m. But still I wasn’t able to save it. But why? Because, till now I always tried to save money after my expenses. I was spending the whole month then trying to save but at the end of every month I had around 1K to 2K. What will I do with this amount? I did nothing but spending. So, spending was my habit. I needed to change my habit. I used to follow the equation Income – Expenses = Saving.

My target amount was 2.5L in 2 years. Forgot how I calculated the amount at that time, but did some calculation specially for medical purposes as per my present location. Also realized I can never achieve that amount in some days, it will take some months. I need to be disciplined and that too for a long time, without discipline I can’t do anything. An instrument like a RD or something will be good for me, I will still have enough in my hand after that. I choose the 5th of every month so that I can save first, no matter what. Also, I will have the flexibility to withdraw it anytime.

So, I started my journey with a RD in my salary account holding bank. The maturity amount was 2.6L which was as per with my target Corpus. Funny thing is that after this I still had 1K-2K in my hand at the end of the month. My expenses were automatically controlled.

You can see that my approach was simple and in the right direction. Maybe this is because I started my career as a banker (though I worked as a site engineer in a private firm before), I was in touch with banking exam preparation with group discussion and all that, I had knowledge about basics of money related things. Also I was lucky to adapt to simple things whenever I made any financial decision. Though I made a lot of mistakes in my life, but I don’t regret it as I have learnt a lot of things. At that time, I knew some among my friends circle, they invested in mutual funds and stocks and others. But I didn’t need it. I knew just a little about them, so I stayed away. We should always try to keep things simple and stay away from unknown products (but also try to learn things to have a start which I did later on).

Now I feel that I was so lucky to learn something at the earliest stage of my financial journey. At that time, I didn’t know about the concept of Emergency Fund (I learnt after an incident). But the important thing is I was going towards learning more things about personal finance, of course after making some mistakes. But I will talk about those later on.

Learnings

I learnt two big things from this event. And whatever I learnt in different stages of my life, I always maintained them. That’s why I feel financially stable now.

  • Save first then spend. Most of us follow Income – Expenses = Saving. That’s the wrong way. It should always be Income – Saving = Expenses. Make saving a habit.
  • We need to be disciplined. No matter what, we need to save regularly. Discipline is the key, it will make you make the right decisions.
Discipline in Investing

How discipline helped me in my financial journey?

Financial stability is a goal which is cherished by many. But not everyone manages to attain it. The secret to financial stability lies in “discipline”. This is how it helped me to feel financially stable.

I have not exercised this habit not for a long time (only about 6 to 7 years). But, within this time period, I greatly felt the need for it. I always save first and then spend. This discipline always enables me to differentiate between needs and wants. This ultimately prevents me from overspending and impulsive spending. But obviously, it took time. Everything takes time.

Discipline forced me to think about Financial Emergency, and led me to build a robust emergency fund. Though it took me a long time to build it, but better late than never. When I learnt about it through a course online, I started with 3X of my monthly expenses. Now I have 8X as emergency fund. This already helped me more than once in crunch situations. These situations have never been able to derail me to attain financial stability.

Debt can be a significant obstacle on the path to financial stability. I purchased a TV, a handset, and a Water purifier with EMI during my early earning days. I had to take out a loan for the repair of my home (it was a great lesson for me, I will try to write about that later). Apart from these, I never had to go for a loan. Why? Just because I have discipline. It turned the tide in my favour. I always plan well before buying anything and discipline always helped me to achieve the corpus which was needed for getting those things. Over time, I became debt free which ultimately helped me to attain financial stability.

Investing is the most powerful tool for wealth accumulation. But without discipline it’s not possible. Discipline and responsibility forced me to think long term and to develop strategies about investing for the long term. And this disciplined strategic investment planning prevents me from taking any impulsive decision during market fluctuations. It allows me to stay committed and focused on my investments for the long term.

Discipline also taught me patience which is so important for anyone’s financial journey. Though I have made so many mistakes in my journey, somehow I have been able to pull things off very well all the time. Patience helped me to learn from these mistakes, research various financial products and strategies. It always enabled me to research, read about things, whether for tax planning or child education planning or retirement planning or any other financial aspects. Maybe that’s why I never made very serious kinds of mistakes or those which cannot be undone.

How I mastered discipline?

I started my journey with a RD. Why? I didn’t have the habit of saving then, so I had to automate my savings. While I was searching for the best mutual fund, I found SIP terms everywhere. Thought this is also an automated process. So, after 1 year, I started a SIP in a tax saving mutual fund. Then for about 5 years I continued to invest through RD and SIP, a lot of things happened, we can talk about them later.

But now I have become actually disciplined. For the last 1 year, I have been investing manually. Whenever I have money to invest, I just open my Mutual Fund account or Bank Account and manually invest through Lumpsum as per my plan. I don’t need to automate my saving now.

Conclusion

Since childhood, we were taught to be disciplined in our day to day life. But, we don’t follow it. In personal finance, if you want your money to shine in the future, you have to develop the habit of discipline. It’s the cornerstone of financial stability, empowers you to make prudent decisions, build healthy money managing habits, stay focused on long term goals and take control of your finances. With disciplined approach you can achieve long term financial needs without depending on others. Remember, it’s the consistent small steps that will lead you to significant long lasting achievements.

Read more about Author’s journey here:

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