Saving and spending money when you are in your 20s is something we all struggle with. I always say this, but the American school system has failed us and does not teach us what we need in life. We are not given the right tools to succeed in life. We learn to take tests, remember and regurgitate things on paper, and are graded for it, but we are not taught the basics.
Some of the things on our lists may seem obvious, but some people don’t realize it, which is why educating people about money is essential. That’s why it’s essential to educate people to spend their money wisely. So, without further ado, let’s dive into this blog and learn how to become more fiscally responsible.
1. What does it mean to be fiscally responsible?
Being fiscally responsible is often necessary and important as it helps us to keep our finances in order. It involves making smart decisions whenever you are suing or spending money. Most people use the term fiscally responsible when talking about government spending, but this can also be applied to the micro and individual level.
It allows people to make smart moves about their money and also helps them to become more financially independent. Let’s be honest for one minute, we live in a capitalist society, and money is a tool that we need to harness to keep control over our lives and live it however we want.
2. Make a plan of action
You need to know how much money you make each month and how much you spend on average; in the perfect world, the latter shouldn’t exceed the former. One way to do this is by looking at your bank statement, which is usually a nightmare because it will make you realize that you are spending money on unnecessary things.
The ultimate goal of this isn’t to change your spending habit immediately, and it is a way for you to work on it and slowly change it over time. But taking notes of where and how you spend your money will help you avoid this in the past. This will teach you money mindfulness, and this will help you in the long run.
3. Live within your means
By this, we mean that you shouldn’t spend more money than you actually make; this is a sure-fire way to g broke and keep you in the red when it comes to your credit score. After mapping out your expense, you can then create a budget. Use the information you gathered while monitoring your bank statement to create a course of action.
Create categories to better a lot of your money. These categories can be expenses, leisure and going out, food and saving. These are the simplest and most forward categories, but you can break them down further depending on your spending habits.
One quick tip: use your debit card as far as possible as this allows you to track your spending as this amount is instantly deducted from your account, unlike when using a credit card. You need to use your credit card as a last resort option and should see it as spendable money.
4. Budget your treat
This is hard for everyone, especially for someone who loves books and mangas like me. You need to budget how much money you spend on your leisure and going out as this is usually one of the greatest signs of not being fiscally responsible. If you usually buy 5 books every month, try buying only 2 as this will make you only buy things that you will actually read.
Keep a certain amount for this spending each money; once you’ve used it, you are done for the month and can’t dip in your earnings. This will make you be more rigorous on how you spend your money. For example, if you allotted 200 dollars for going out and leisure each month, once the $200 is over, you can no longer spend more money on going out.
Another way to spend money is to cook your food. You can go to your grocery store and see what is on promotion and buy that to prepare your won home-cooked meal. Once you live on your own, you will realize why your parent(s) would always say there was food at home when you were craving fast food.
These are just some of the ways to become and stay fiscally responsible. Sound off in the comments section below and tell us what you want to read next and if you want to read more about being more fiscally responsible.