What is Personal Financial Responsibility
It means changing the way we have been thinking about money the past twenty to thirty years. It means taking a fork in the road as a debtor nation and becoming a nation that starts living within its means. It means...
- A family of four does not need to have two new gas guzzlers in the driveway.
- You do not need to buy a new car every three to five years.
- You need to stop thinking about your home as an investment or a bank account that you can tap into.
- Financial responsibility means putting at least 4-10% of your income away per year for retirement.
- Saving another 6-10%.
- Having at least six month nest egg.
- Only spending what you make.
- Using credit wisely.
It means a lot more things. It means making changes in your lifestyle. The goals I listed may not seem possible for you right now, but they can be. A journey always requires taking the first step. Not only will you be doing the right thing by taking the first personal responsibility step, you will begin to adopt a way of life that is less about consumerism and more about things in life that are really important. Family, friends.
The Road to Personal Financial Reponsibility is Not an Easy One
Why Should you Listen to What I have to Say about Responsibly Managing Your Money?
For one, I live on main street just like you. I have lived the lifestyle this site preaches for the past twenty-five years. But, it was not always like that. There was a time when we were up to our ears in debt. We saw the light, we responded, dug out and have never looked back. The feeling of freedom when you become debt free is incredible.
How We Conserve our Finances
- Contributions of 3 to 16% of gross income (not counting matching) into our 401k since 1987.
- Lived in same home since 1990. Mortgage paid before I turned 55!
- We save (not including 401k) 10% of our net income
- We give 10% to 15% of our gross income to charity
- Paid 100% of Daughter's college expenses (In-state, public university).
- Transportation costs are 4.5% of net income. This includes: insurance, gas, preventative and corrective maintenance. Both vehicles are paid for.
- We have accomplished all of this from our income. No lotto winnings, no inheritance. Just hard work and executing this plan over 25+ years..
While I feel extremely blessed with what we have, this is not to say that we do not have to make tough decisions regarding our situation. For example, when our daughter began student teaching she required a vehicle. While she was good with her money she did not have the resources to buy a car outright or to take on debt for one. To assist her we let her use one of our vehicles and moved down to one vehicle for a few years. Fortunately we were in a position to do this. She was responsible for paying the insurance and for gas. We also required her to keep $800.00 in reserve in case the car needed to be repaired.
Sacrifices we had to make in our early years
M wife and I really do not see any of these as sacrifices. In fact, we are quite content and feel very fortunate and blessed to have what we have.
- We do not have large expensive vehicles that we trade in every 3-6 years.
- We do not own an RV, Boat, or other high-ticket items like these though I must admit it might be fun.
- We only eat out 1 to 2 times a month at the most. When we do, it is nothing extravagant.
- We never go into debt for vacations or to buy consumer goods
So I think my curriculum vitae allows me to proctor some thoughts on personal financial reponsibility. If you are looking to live a more conservative financial lifestyle wouldn't you want to get advice from someone walking the talk? You certainly would not consider signing up to learn piano from someone that cannot play the piano.
What is in it for you?
If debt is ruling your life...
If you are willing and can accept making some lifestyle changes...
If a situation similar to ours appeals to you...
Take the first step. Your first step might be to get out of debt. You can do so by downloading my free excel spreadsheet that can help you to get out of debt. Your first step might be to create a budget to see where your money is going. You can do this by managing a budget. I have a great one that I use that costs less than $10..