We hear a lot in our day about fiscal accountability and responsibility, and as far as our media saturated ears are concerned, it always sounds like a more collective topic, than it does a personal topic.
The truth is that it's both. While our country's fiscal situation is relative, it's also mostly out of our control. Our own personal fiscal situation is also relative, and by contrast, almost completely within our jurisdiction.
Whether you live alone or are part of a family, you can have a form of fiscal responsibility and accountability within your household.
The way you go about that will depend on your own unique situation, but what we can do is look at several transcendent concepts behind fiscal responsibility and talk about how they can be applied to your own way of life, and gradually produce financial freedom.
Here are the specifics of what I'm going to cover:
- Creating a budget.
- Strictly adhering to the disciplines of a budget.
- Avoiding wasteful habits.
- Creating an atmosphere of contentment.
- Paying yourself.
As you can probably tell, what I want to talk about today is only somewhat specific, in favor of being mostly conceptual.
That's because I'm of the opinion that if we understand fiscal concepts, we can do a better job of acting responsibly in all of the different financial situations we have in our lives.
So whether it's about going out to eat, buy stocks, refinance our mortgage, buy a new or used car or whatever situation we find ourselves in, we can make our decisions based on these reliable conceptual ideas.
Building a Budget
The first step to developing fiscal responsibility is to simply make a budget. It's not at all complicated, since you're basically just saying, "This is what I need to spend, and this is how much I need to have set aside to cover that spending."
Strictly Adhering to the Disciplines of a Budget
The rest of the money left over can be divided up at your discretion, as long as your goal of having enough to pay all your bills comes first. So the goals of having a budget are the following:
- Whether it's in your mind or on paper, make sure you know ahead of time what your expenses are going to be.
- Pay for what you need first.
- Only buy what is not needed (or the things you simply want) after what you need is paid for.
- Make sure that you always have enough money on hand to pay for what you need.
- Don't allow unplanned purchases for unnecessary things get in the way of paying for weekly expenses.
Even if this is the only topic you get to, it's enough to do a tremendous amount of good for the fiscal situation of your household, not to mention it's quite easy.
Avoiding Wasteful Habits
As your budget begins to affect how you spend money, you'll probably begin to automatically weed out wasteful habits, like going out to eat too often, buying food you don't need or paying extra money for movie channels or pay per view.
What is deemed "wasteful" in your own life can only be determined by you, but as your budget requires a certain amount of money every week, you'll realize that there are certain things in your life that are causing you to fall short, or come close to falling short of that mark.
The bottom line is that if you're spending too much, you need to cut waste.
Creating an Atmosphere of Contentment
Once again, as you get used to the aspect of having a budget and living within your means while cutting out wasteful spending, this should occur naturally.
Being content with a certain financial structure to your life is incredibly important when it comes to fiscal responsibility. Credit cards have allowed us to feel like we can have anything whenever we want it, which was never the case.
Being satisfied with not being able to have certain things will enable us to be peaceful and contented during the times when we can't afford them.
That patience and waiting period will then eventually lead to a time when we can afford them, which is great news!
The task then, is to be contented within a budget so that you can save money over time, grow your wealth and get to the point where you're free to get more of the things you want without going into debt.
Remember, contentment and budgeting is about financial freedom, not restrictions.
As your budget enables you to pay your bills and discipline your fiscal movement, you'll inevitably have money left over, and if you don't right away, just give it time.
With that extra money, you can then start to "pay yourself" by setting that money aside, putting it into a savings account or investing it.
The idea is that instead of having your entire paycheck already spent, you've got some available to actually keep, hence the term "paying yourself". If you don't have any left over, then everybody gets paid except you.
If you can get the concepts down and let them change the way you approach your money, they absolutely will lead your household to greater fiscal responsibility, which will eventually lead you to financial freedom.
Financial freedom, given time, will then lead to true and genuine wealth.
Brandon Mills is a professional blogger that provides financial information and advice for loans and applying for title loans online. He writes for TitleMax, a highly recognized title loan company.