How To Be Financially Responsible Without Letting Money Rule Your Life

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Financially

There’s a common misperception that being financially responsible means you are completely obsessed with money and not in touch with your true self. People often assume that you have to be a stodgy millionaire to know how to balance a checkbook or invest in financial opportunities. The truth is that you can be financially responsible without letting money rule your life….and, in fact, the former will help the latter.

The more you can be financially responsible, the easier it will be for you to not obsess about bills and expenses. 

You can find an equilibrium in life where you’re not consumed with money matters.

Understand which forms of insurance you need

There are so many different kinds of insurance out there, it’s hard to keep track of it at times. But not all insurance is equal. Everyone knows you need health and car insurance, but what about accident insurance or liability insurance? 

Understanding the salient features of different policies and coverage is very important. If you’re deciding between term life insurance vs whole, for instance, you need to understand what these plans will cover and what the short-term and long-term advantages are. A person looking for a predetermined length of coverage will want to opt for a term life plan, whereas someone looking for a tax-advantaged, long-term plan will likely want whole life insurance.

Simplify your life by living within your means (no credit card debt!)

One of the biggest problems in modern life is being too attached to materialist goods and services and consuming more than we need. Most Americans live well beyond their financial means, meaning that they spend more money than they earn and put the rest on a credit card. For obvious reasons, this is not a sustainable lifestyle.

By distilling your life down to its core essence – determining what you actually need as opposed to illusory desires you think you want – you can rein in these expenses. Doing so will not only clean up your finances but will also simplify your behavior and thoughts in a way that will benefit other areas of your life.

Invest in yourself and your ideas 

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Being financially responsible doesn’t mean that you can never take a calculated risk. For example, if you have an entrepreneurial idea you’re passionate about and you think is lucrative, you should allow yourself to at least explore it as an option. Sometimes you have to take measured risks. As they say, you’ve got to spend money to make money. 

Of course, that doesn’t mean you should accrue an enormous amount of debt (see previous tip) chasing a pipedream….but it does mean that you’ve got to trust yourself and have faith in your own ideas. 

This goes beyond just the financial side of things. Life is too short to let fear rule your decisions. If you don’t seize on your instincts and trust your gut, you may regret it someday.

Don’t worry about what you can’t control, but be proactive about what you can control

This is an age of high anxiety and, unfortunately, many people spend countless hours each day obsessively worrying about everything that could go wrong. The reality is if you’re worried about something you literally have zero control over, you’re wasting your time. Conversely, it seems like an awful lot of people don’t spend enough time focusing on what they can control. 

There’s a big difference between worrying about the end of the world and worrying about how to get yourself in better shape: you have no control over the end of the world, but you do have control over your exercise habits and diet. This also extends to financial matters. 

A whole lot of people stay up late at night in bed entertaining worst-case scenario disasters that could bankrupt them. It’s probably a better use of mental bandwidth to instead consider practical steps you can take to save money in case of financial hardship. It’s easier said than done, but you can harness your mind and control which thoughts rule your thinking. 

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