How To Become More Financially ResponsibleApril 2, 2014
Being financially responsible and stable doesn’t happen easily for many people throughout the course of their lives. If they were never taught the basics about money management, how could they ever really know how to be responsible with money? Those who were fortunate to be exposed to money saving tactics when they were kids probably have more of an idea on how to take care of their money now that they are adults.
Some people that are well into their 60′s still don’t have a clue on how to manage their own bank accounts and financial responsibilities. Don’t worry. There are some basic tools to learn that can get you on track at any age and any stage in your life.
Start With An Expense Report And Build A Budget Plan
This may be a difficult task to do if you have never lived by a budget, but many people have to do this well on into retirement. If you are constantly spending more than you have coming in, it’s time for an expense break down and budget plan. You need to break down your current expenses into the areas of leisure/entertainment, necessities, bills, food, medications, rent and so forth.
You must be completely honest with yourself here. If you spend $50 on cigarettes every week, write it down. If you spend $250 on clothes every two weeks, write it down. This isn’t a time to hide your bad habits, as they are costing you money too. The sooner you can see how much you are spending every week or month, the sooner you will see why you may be suffering financially.
After you have done the expense break down you can start on building your budgeting plan. Write down the important things you need every week and put them in the appropriate categories. Give yourself a fixed amount for each area. For example, $50 a week for entertainment like going to the movies, dinner or drinks with friends. Do this for all areas of your life and then work on sticking to your budget. If you are unsure of whether your limits are reasonable, ask a family member or friend who seems to truly know how to take care of their finances.
Pay Off Those Unwanted Credit Cards
Now is the time to get rid of any credit cards that you do not need to hold onto. If they are maxed out, start making your payments. Remember, this was not your money to begin with and you do owe the financial institution.
Keep your credit history safe or start repairing it by making payments. Keep one credit card for emergencies and get rid of the rest. You don’t need more than one if you are someone who cannot keep up with their bills. By getting rid of these credit cards you will be well on your way to becoming financially responsible.
Start A Savings Account
This is a great way to save money and protect yourself should you ever need emergency cash. Open an account separate from your regular bank accounts and keep this bank account only for your monthly deposits. Try and submit some of your monthly income to it every month and see it grow over time. It may not look like much after a year of saving, but as the years pass you will have a sense of confidence with regards to your financial issues. Most of the time, once a little bit is put in savings we don’t even remember it. Out of sight, out of mind.
Protect yourself and finances by taking action today. It doesn’t matter whether you are in your 30′s or 60′s and it is never too late to take charge of your financial future. In the long run, you will feel more calm and at peace with yourself if you know you are on the road to financial recovery.