The Financial Responsibility Basics

Regardless of your individual financial picture, financial responsibility is about making smart decisions with your money, everyday, every purchase, and always with some attention to the future. It takes information, planning and self-control. But don't let that scare you away from trying to be responsible with your money. Here is a very basic starting plan to being financially responsible.

The Information

Know the difference between an essential cost and a discretionary one

Your heating bill is an essential cost, your cable bill is not. In fact, there are really very few essential costs. Rent or mortgage payment, utility bills, groceries and transportation costs (car or monthly bus pass) are the basics. If you have young children, then you have a few more. But everything else is discretionary which means you can do without, or do with less of any time the finances are tight. When you are deciding if you really need something, be realistic about whether it is a need (essential cost) or a want (discretionary cost).

The Planning

Keep track of your spending

This tends to freak people out, but at the most basic level you need to write down every time you spend money. That is all there is to it. And that means if you use a credit card, if you pay cash, if you write a check, or use your bank's bill pay system, write down those expenses. That means whether you buy coffee at Starbucks, or rent a movie at Blockbuster Video, or take a trip to the grocery store, or gas station, all of those expenses, even the small ones, need to be recorded. And do not forget that your bank and your credit cards send you statements every month. That means half of the work is already done for you.

The purpose of writing it all down is to understand where you spend your money, as best as you possibly can. It is about making informed decisions about your money when you need to.

Don't sit on your debt, pay it down

Managing your credit cards is a skill, something you need to work on from the moment you sign up for your first card. Not only should you pay as much as possible to your credit cards every month, but you also need to prevent yourself from putting additional charges on the cards. If you pay off your credit cards to a zero balance each and every month, then you are way ahead of the rest of us. But if you carry a balance on any card, you cannot keep using that card if you ever expect to get ahead in your finances.

The Self-Control

Spend less than you make

It is easier to say than it is to do, but it is especially important when there is less money to go around. If every dollar goes to necessities, then sometimes there is no way to spend less. But in other cases, you need to consciously make the decision to not buy something in order to keep your credit card balances down, or have more cash for the end of the month.

Know when you are in trouble, and when you are not

All of these steps take some practice. Just like anything else, you need to balance what makes sense on paper and what actually fits reality. But you also need to realize when it is not time to hit the panic button. Because even if you do not have a perfect record with your money, just the fact that you have started thinking about these things means you might be in a better position than most.

Andrew Marx writes articles on topics including personal finance and higher education, emphasizing a practical and informed approach to his ideas. His weekly column can be read at http://www.smartremarx.com.

What Everyone Should Know About Their Credit Report That Most People Don’t!
There are many misconceptions about credit scores out there. There are people who believe that they dont have a credit score and some who think that their credit scores dont really matter. These sorts of misconceptions can hurt your chances at jobs, good interest rates, and even your chances of getting an apartment.The truth is, if you have a ban...

Taking 100% Responsibility The Prerequisite for Creating Money & Marriage Success
In his book, Success Principles, Jack Canfield shares a story about working with W. Clement Stone, a self-made millionaire worth $600 million in 1969. He tells how Mr. Stone pulled him aside one day and asked him if he took 100% responsibility for his life. Jack stutters, I think so. Stone replies, This is a yes or no question, you either do or ...

Your Credit Report After Bankruptcy-What To Look For
Do you KNOW what is on your credit report? Even if you have just filed bankruptcy it is EXTREMELY important that you KNOW how it is reported on your credit report. It is NOT the credit reporting agencies responsibility to make sure that your credit report is accurate. It is YOURS, and only you can make sure that it is.After receiving your bankruptc...

How to Control Your Expenses to Eliminate Debt
This sounds simple, but to control your expenses you first must understand what they are. The only way to be sure you know what you spend is to record everything. This is hard to do. Then you will need to do something even more difficult, Sacrifice and Live on a Budget.Ouch, all people including you and me hate those two words. But it will take sac...

Embarking on the Journey to Building True Wealth
Some may not realize however that finding the road to financial wealth involves building true wealth first and foremost in oneself.Have the Right AttitudeBuilding true financial wealth starts with building your inner attitude towards achieving your financial dreams. You need to recognize first of all that you cannot get rich in a blur. You do n...

Business Ethics & Social Responsibility
The purpose of business is to generate maximum returns for its owners and shareholders. So therefore should the business pursue all activities that enhance profitability and increase the value of the business for the owners and / or shareholders?I also believe that a business should behave ethically in achieving the above purpose. It is not right j...

Teen Consumers Need to Learn About Money Management and Protection
Teens are prime targets for marketers. Today's marketers are targeting preteens, teens, and especially skippies -- school kids with money to spend. According to "Targeting Teen Consumers," an article on the Newspaper Association of America Web site, teens spent $158 BILLION dollars in 2005.And 46% of teens (ages 12-17) plan to spend more money ne...