Are You Financially Responsible? First off the term “financially responsible” has a very broad meaning. At the core it just means spending less than you make in income or also known as living within your means. If you have a large salary or you are a gazillionaire then that should be a fairly easy level of financial responsibility to hit. However we have all heard of high-paid celebs or mega lotto winners that couldn’t maintain financial responsibility and were hitting the skids.

The higher levels of financial responsibility takes things to a different level where you are not only living within your means but you are going beyond that even without having a huge salary or the riches of a kingdom backing you up. There are some key financial-state attributes that it takes to reach higher levels of financial responsibility.

You make a modest or higher salary for the area of the world you live in.

But you not only live within your means but you are also able to:

Have your own personalized strategic spending and saving plan.

Set a budget well below your means and live a smart frugal balanced life where you don’t feel like you are living a deprived life but one where you have removed spending waste from you lifestyle so you can maximize saving and investing.

Save money toward your long-term goals.

Whether that is early retirement or eventual retirement, etc.

No debt.

Or having a solid escalated debt repayment plan with timelines and tracking to measure your progress.

Have an emergency fund to carry you for 3 to 6 months of living costs.

Or cover an unplanned unforeseen expensive cost that may happen.

Have the spending discipline to only use your credit card for convenience and for receiving the credit card’s rewards cash or points.

ALWAYS paying off the balance each month so you never pay interest on a balance owing. Never using your credit cards to make ends meet during the month and carrying a balance. At the highest levels of financial responsibility you may even develop a tendency to vomit in your mouth at the thought of using your card to buy clothing, shoes, dinner out, or some other item and paying interest on that purchase.

Saving for and paying cash for large purchase items.

Like a replacement (reasonable) used car, appliances, taking vacations, etc.

Avoiding any kinds of loans other than a Mortgage.

Shoot for a low-interest rate Mortgage for a modest home. Seek limiting payments to less than 30% of your income.

You don’t need to keep up with the Jones, Smiths, or anyone else.

Understanding the difference between needs and luxurious wants so you don’t succumb to the temptations that are all around you.

Where are you on the Financial Responsibility Scale?

The more of the above key financial-state attributes of the financially responsible you have going for you the higher you are on the financial responsibility scale. Being anywhere on the financial responsibility scale is by far better than being financially irresponsible.

Final Comments

Becoming financially responsible is the first step toward reaching financial independence. It is a process and does take discipline and control to complete the journey.

There may be challenges along the way but stay focused, there is a whole lot of living to do between when you start your financial journey and when you reach your goals. Just keep plugging away at your plan.

Are You Financially Responsible?