Financial responsibility is an ideal that everyone wants to achieve, and there are many ways to go about it. But people can also engage in practices in the mistaken belief that they are being financially responsible. What some people might see as an asset is really just an expensive luxury, and what some people call investments are really unnecessary expenses. Being financially responsible involves knowing the difference between these things and making smart choices. Here are some of things you should not mistake for being financially responsible.
Buying a Car
For many people, a car is an important symbol of their financial independence. But while a car might be an important status symbol, it doesn’t say anything about the true state of your finances — let alone, if you are in fact financially responsible. Car maintenance can be expensive, so you have to decide if it’s really worth it. Is your car instrumental to your job? Can you get by using public transportation?
Preserving your health is important, but you do not have to spend more than is necessary to preserve your health. Use generic drugs instead of brand name ones, and look into other forms of alternative medicine that may cost nothing. Changing your diet or your lifestyle can save you a lot in the long run if you make the effort.
People often join a gym believing that they are investing in themselves. The problem is that many people stop going regularly after a couple months, but the automatic payments are still ongoing. If you won’t make use of the gym, then find less costly ways of exercising. You should only consider a gym membership if you are truly committed, otherwise consider alternatives such as following Internet videos.
Confusing Affordability with Value
Just because something is affordable, doesn’t mean it has value. Many companies will market their products on the basis of price, and while you might pay less for a product, you end up wasting money in the long run because of poor quality. If you’re going to have to repair or replace a particular product shortly after you buy it, then it is not really worth the price.
Financial responsibility involves knowing whether something is truly an asset or a liability, and being able to see past the price. When you invest in yourself you must be committed, otherwise you are draining your account. If you would like to learn how to be truly financially responsible, then talk to one of our advisors today.