Many of us know that we should be financially responsible because it’s a good thing to be, but do you know why? Being a financially responsible adult means that we are good with our money, but what does that really mean? In my opinion being good with money means that we save money on a regular basis for our financial goals, we manage our debts to build or maintain a good credit score (750 or higher) and we live on a budget to make sure that we can afford our lifestyle. However just like the definition of rich or wealthy, the definition of good with money means something different for everyone.
What is your definition of good with money?
Peace of mind. Maybe you consider yourself good with money if you have a financial peace of mind. If you have an emergency saving fund in case of an unexpected event, if keep a balance in your checking or savings account and if you don’t live paycheck to paycheck you may consider yourself to be good with money.
Protect yourself from fraud. Being good with money may be described as preventing yourself and your money from any potential fraud. You can protect yourself from potential identity theft and fraud by ordering your credit bureau on a regular basis (ever 12 months) as well as checking your bank account and your credit card transactions on a daily basis. If you don’t recognize some transactions it is a good idea to contact your financial institution or Credit Card Company as soon as possible in order to prevent any further theft or fraud.
Living on a budget. If you are like me then you don’t like surprises when it comes to money. I like to know how much money I have, how much money I earn and how much money I spend. Living on a budget makes sure that I don’t over spend. It also ensures that I save for my personal financial goals. Of course we can always have more money, but living on a budget ensures that I always live within my means.
Spending money on quality items. You may consider yourself good with money if you value every dollar that you earn, after all you do work hard for your money. I wouldn’t consider myself to be cheap, but I am definitely picky about where (and on what) I spend my money. Of course I am guilty of making impulse purchases and there are definitely purchases that I regret; but in general I like to think that I am good with my money. To me being good with money means that I chose to spend my money on quality and not quantity. I don’t care if I have a lot of clothes as long as I have enough good clothes to get me through each of the four seasons. Spending $500 on a winter coat may seem like a waste of money to some people, but if you have that winter coat for 10 years it’s actually money well spent.
Photo by cell105