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How to Be Financially Responsible

“There are plenty of ways to get ahead.  The first is so basic I’m almost embarrassed to say it:  spend less than you earn.”  ~ Paul Clitheroe.

What does it really mean to be financially responsible? The answer to this question is very simple, it simply means living within your means. And to live within your means, you need to spend less than you make. If it is that simple, why then do we struggle to be financially responsible? What can we do to stay financially responsible?

Below are a few pointers to consider where financial responsibility is concerned.

1. Act in your own best interest

For many, cutting down on borrowing is easier said than done, but you can do it. It all comes down to knowing the difference between your needs and wants. For instance, you might need a car, but you do not need a big sports utility vehicle.

Likewise, where owning a home is concerned, a mansion is not really a necessity, but having a roof over your head is.  Having a mortgage is one of the steps to financial freedom, but this should be done in a financially responsible manner.

The bottom line here is that in all decisions you have to make that will bind you financially, always take the choice that eventually leaves you better off.

2. Pay Yourself First

Spending every shilling that you earn is not prudent. When you spend money, you are simply paying others. Rent is paying the landlord, shopping pays the merchant, settling your bills pays the recipient, and so on. But when you save, you are paying yourself.

You also need to think about retirement. It is a certainty for all of us if we live long enough. A great way to save for retirement is once you pay your bills, aim to save at least 10% of your disposable income.

3. Debt

Mobile loans, like all forms of debt, should be used wisely. It is important to remember that mobile loans carry very high rates of interest compared to other forms of debt. Unless in cases of emergencies, regular use of mobile loans is an indication that you are already spending more than you earn, which is more than you should.

Pay off your loans promptly each month. However, mobile loans should only be used for emergencies, not to make ends meet just because they are easily accessible.

4. Get an Emergency Fund

An emergency fund can help you avoid loans, especially mobile loans, in most cases. We often borrow in emergency cases. An emergency fund is the exact opposite of a mobile loan. While the loan requires you to pay exorbitant interest, a good Emergency Fund should pay you interest.

When looking for an emergency fund, ensure they pay interest rate that is higher than the rate of inflation and the funds are easily accessible.

5. Worry Not About Thy Neighbors

Everyone needs to take care of their needs and the needs of their family. To make this happen, your focus should be internal. The neighbors do not pay your bills, so their spending habits should not dictate yours or set the bar for your standard of living.

6. Budgeting

This is the foundation of financial responsibility. A budget will help you to keep track of your money and live within your means. Business owners and managers know the importance of understanding income statements, balance sheets, and cash flow. That is why successful businesses always work with a budget. Governments also use budgets to plan and monitor their finances. You should also embrace budgeting at a personal level.


Financial responsibility is the first step towards attaining financial wellbeing. Financial responsibility means living within your means, regardless of your income level. That is why you need to take a closer look at your financial situation. Evaluate your income and spending habits to establish patterns, then proceed to make the necessary adjustments to put yourself on a firm financial footing.


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