Most of us like to think that we are financially responsible. However, it’s very possible that you aren’t actually as financially responsible as you think. Just being able to pay the bills isn’t true financial responsibility.
Meeting Your Obligations Isn’t Financial Responsibility
My senior year in college, I was under the impression that I was financially responsible. I was a resident adviser, and my “job” paid me a stipend, as well as provided me with free housing. However, I had maxed out credit cards. But I made the minimum payments each month, made my car payment, and managed to cover other expenses. I figured the mere fact that I didn’t pay late, and that I met my obligations meant I was financially responsible.
But I wasn’t.
Simply paying your bills isn’t the same as being financially responsible. Indeed, much of the reason I was able to meet my obligations on my meager stipend was due to the fact that I had taken out the max in student loans. I had a scholarship, and a job, but I was still taking out student loans. Meeting the minimum isn’t financial responsibility, and financing your lifestyle isn’t the same as actually being able to afford it.
Financial responsibility is about making hard choices and sometimes curbing your wants. I never said no to a trip to Las Vegas, or a road trip to the Grand Canyon or DisneyLand. I should have, though. True financial responsibility would have been recognizing that I couldn’t really afford those things. I only thought I could afford them because the low credit card minimum payment made me feel as though it was all manageable.
True Financial Responsibility
True financial responsibility involves living by basic principles that encourage you to use your money wisely, to improve your situation over time. It means using your financial resources wisely, so that you are using your own money, and not always borrowing someone else’s (and paying interest) to make ends meet. Some of the basic indicators of financial responsibility include:
- Willingness to say no to some “fun” expenses in order to avoid debt.
- Paying yourself first by contributing to a retirement account and an emergency fund.
- Not worrying about how others will judge you for your financial decisions and lifestyle.
- Creating a workable spending plan and sticking to it.
- Paying off your credit cards in full each month, rather than carrying a balance.
Honestly look at the way you conduct your finances. You might feel as though you are financially responsible, but when you look closely, you might find that you aren’t as responsible as you though. If you find yourself regularly transferring a small amount of money from your emergency fund just to cover a small expense, or if you regularly carry credit card balances in order to “afford” something you don’t actually need, you might not be as financially responsible as you think.
Really consider your situation, and decide what you can do to take charge of your finances and become truly financially responsible.