Importance of Financial Responsibility

by Melvin Richardson ; Updated July 27, 2017

Financial responsibility is important because it impacts your future. Making the right decisions early in life concerning your money, can help you become financially independent and live a comfortable life during retirement.

Time Frame

When you are starting out in life, it’s a good idea to understand how money works. The earlier you start to save, the more compound interest works in your favor. You earn interest on top of interest.

Effects

Make sure you pay yourself first out of every paycheck. Strive to save 10 percent of your savings. If this amount is too difficult, start at a lower percent and work your way up.

Video of the Day

Brought to you by Sapling
Brought to you by Sapling

Benefits

Many people have a substantial amount of credit card debt. Credit cards should be used for convenience and emergency purposes only. If you can pay off the balance when you receive your statement, you can keep from accumulating debt and paying finance charges.

Planning

Talk with a financial planner or adviser and try to find ways to make your money grow and work for you. There are a number of avenues for investing you can explore.

Prevention/Solution

Avoid the spur-of-the-moment expensive purchases, especially if you think it may be difficult for you to make monthly payments. Understand the distinction between needs and wants or necessities and luxuries.

Warning

When you don’t exercise financial responsibility, some of the difficulties you could encounter in life are bankruptcy, consumer credit counseling, collection agencies, collection accounts, eviction, legal action, judgments and foreclosure. Some people need to work well beyond their retirement years because of no financial discipline.

About the Author

Melvin J. Richardson has been a freelance writer for two years with Associated Content, and writes about topics such as banking, credit and collections, goal setting, financial services, management, health and fitness. Richardson has worked for several banks and financial institutions and gained invaluable experience and knowledge. Richardson holds a Master of Business Administration in Executive Management from Ashland University in Ashland Ohio.

Cite this Article A tool to create a citation to reference this article Cite this Article