A Starter Guide to Responsible Finance

Everyone has an area of their life where they could use a little improvement and advice. Some of us aren’t great at math. Some of us could probably be a little more patient while sitting in traffic. And, no doubt, some of us need some help when it comes to our finances. Whether you are someone who is just starting out in your career, or you’re looking to get back to financial basics, it’s always good to think about the basic principles of responsible finance.

So, with that in mind, here are a few helpful tips to guide you towards a stable and balanced financial future. Here we go.

Tip #1 – It all starts with you.

The biggest factor when it comes to establishing a responsible financial plan is you. We are often our own worst enemies when it comes to our finances, and it would behoove anyone who is looking to improve their finances to study themselves and learn their weaknesses, along with their triggers for making poor financial decisions.

Maybe you really love eating out, and you hate shopping for groceries and don’t like to cook affordable meals. Maybe you have a dozen subscription services, half of which you don’t really use. Perhaps you get a little too click-happy when shopping online. Whatever the case may be, the first step in moving towards responsible finance is recognizing where you are irresponsible today. By acknowledging your weaknesses, you’ll be better prepared to start building up some strengths.

Tip #2 – Save it for a rainy day.

Along that same line of thinking, here’s something you should consider before you make that next impulse purchase: Will you need that money later, and do you need to make this purchase right now? If the answer to the first question feels like a ‘yes,’ and the answer to the second question is a ‘no,’ go ahead and hold off and keep that money stashed away.

The truth is that financial difficulties and big expenses can pop up out of seemingly nowhere. It’s really important to have some savings set aside in case you need them, and you should prioritize that over ‘fun’ purchases. It might feel disappointing in the moment to not make that exciting purchase, but you’ll likely feel grateful you didn’t, and maybe sooner rather than later. It doesn’t even take some kind of financial crisis to experience that feeling; all it takes is looking at your bank account and realizing you did the responsible thing.

Tip #3 – Necessities first.

This seems like a simple one, but where the problem comes in is in the definition of ‘necessities.’ Is a video streaming service a necessity? Is an online music service a necessity? Is getting takeout five times a week a necessity? Truthfully, we often need much less than we think we do, and many of the things we think we can’t do without are things that we could drop and not think about again with just a few minor lifestyle adjustments.

Sit down and make a list of actual necessities. Put those in one column. Then put a list of things that aren’t necessary, but which you really like in another column. Then go down both lists and make sure those items are actually accurate. You might surprise yourself with what you’re willing to cut.

Tip #4 – Consider your retirement.

For young people especially, it’s hard to think in terms of decades. And, of course, none of us are really assured of tomorrow. But that doesn’t mean we should be irresponsible with our money. Putting away a retirement nest egg is something that really depends on years and years of continual contributions. The sooner you start, the better, and every year that passes without you setting aside retirement funds is money you won’t have later. Start building your retirement today, in the hope that you will be able to one day make the most of it.   

Tip #5 – Make a plan.

This is the simplest tip, but the most important of all: in all that you do financially, have a plan. It’s OK to splurge sometimes. It’s OK to have fun. The important thing is to make sure that you plan for necessities first, and then make a plan for when and how you spend your money otherwise.

Make an actual plan and write it down. Think about what you do for your job. What if you applied that same level of professionalism and structure to your personal finances? If you take the time to do so, you’ll likely find yourself stressing out about finances much less over time. Sometimes, the best step towards financial responsibility is just admitting that you are responsible for your finances and planning with that in mind.


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