Although financial responsibility is key to success and happiness, it’s often not something that we’re taught when we’re young. Which means that it’s possible to get to a pretty ripe old age and still not really be very good with your money. However, all is not lost, as there are some easy ways to become more financially responsible.
Learn how to budget
This is probably the most fundamental part of financial responsibility. If you take responsibility for your spending power then the rest is easy. That means having a good, solid understanding of what you are bringing in every month, how much of that is required to cover your outgoings and what you have left. If you don’t have a monthly budget right now then your first step on the path to financial responsibility is to get used to working with one.
Avoid the red letters
Yes, paying your bills on time is all part of financial responsibility. No one likes paying bills and it’s far less satisfying than buying a new pair of shoes or even saving the money for a big purchase. However, it’s a necessary part of learning how to meet the financial obligations you’ve signed up for.
Be in the know
Knowledge is key to financial responsibility. Do you know how much you have, what your earning potential is and what your debts are costing you? If you’re ignoring this information because it’s not entirely positive – or you just have no idea – then you’re not being responsible for your finances and could easily make some big mistakes.
Debt is a very useful
tool for modern living. If you want to buy a home, start a business, get
married, have children or study then it may well be something that you have to
get to grips with. Borrowing well is very important for financially responsible
living i.e. borrow what you can afford to repay – certain loans such as
bad credit loans may
well be necessary
in some circumstances but they will never have the
cheapest interest rates so make sure you know what you are committing to. And if
you do take out a loan always make
repayments on time and use the money for something that benefits you.
Many of us give in to emotional spending every now and again and we make rash purchase decisions that aren’t very responsible. However, if you’re doing this on a regular basis this is problematic. Learn how to divorce spending decisions from emotions and buy smart instead. Shop around for the lowest prices, work out what luxuries need to go if your budget is stretched and create extra value from loyalty cards, points and schemes that accrue when you spend.
Stay on top of your credit score
If you want to be able to make your finances work for you in future then the credit score is key. Factors that will affect your creditworthiness include how much you’re currently borrowing, whether you’ve missed any payments and even something as simple as whether you’re on the electoral roll. Check your credit score regularly to see if anything changes and make sure you clear up misunderstandings and mistakes that could stand in the way of any credit you want.