Having a good relationship with your money is one of the key ingredients to living a less stressful and more comfortable lifestyle.
When you’re able to make responsible choices with your money such as budgeting carefully and spending deliberately, you end up having more control over your time, your possessions and even your priorities.
But there’s one really important underlying notion when it comes to financial responsibility that’s often overlooked and that’s the impact of personal financial responsibility having on others around you.
In my experience as a father, husband, leader, and businessman, personal financial responsibility has a huge impact on our families, friends, and our networks.
Financial responsibility, or better yet lack thereof, can often be taught through example. Not only do kids learn basic behaviors from their parents, but they also learn financial behaviors.
If you want your kids to learn how to become financially responsible, there’s a good chance it starts with your own relationship with money.
Savings are at an all-time low!
Even with the substantial financial advice that’s readily available for just about anyone, America is still in a financial crisis.
According to a report from Forbes, 69 percent of Americans have less than $1000 in savings, and 34 percent have absolutely nothing at all tucked away.
To say the least, those numbers are not good whatsoever.
How did we get here? Does this contribute to an entitled generation? What are the implications of a financial lack of restraint?
So how do we become better at managing our money?
A few things come to mind right away – and I’m sure you’ve heard all of these before.
Living below your means, paying off your debts (on time), saving proportionately, and overall just being responsible with your financial resources are all great places to start.
Sure they sound simple, and they are for the most part. But putting them into practice to seems to be the challenging part for most people.
Really, and more often than not, it comes down to discipline and being able to sacrifice some of those short- term pleasures for long term gain.
One thing that I’ve found which really helps me when it comes to the spending and saving side of this is being honest and fair with my future-self. One of the techniques I use for this is called the 72-hour rule which I’ll explain below:
The 72-hour rule explained
The 72-hour rule is quite simple and will be a game-changer when it comes to helping you make better decisions for prioritizing your spending and in result, saving, habits.
The rule is that if you’re feeling a desire to purchase something, let’s say a new watch, that you might not necessarily *need* then take 72 hours to think about it and sleep on it.
If you still have a burning desire to purchase that item, whatever it is, then maybe go for it.
But chances are that after a few nights’ sleep, you’ve gotten busy, and so preoccupied with other things that you’ve even forgotten about why you felt like you needed to make that purchase in the first place.
Your wallet, savings account, and future-self will thank you.
Personal learnings about Financial Responsibility
In my opinion and from what I’ve experienced, financial responsibility stems from both a conservative mindset related to finances and a willingness to earn more as a way to stay ahead of current and future expenses.
This is a lesson that I learned nearly twenty years ago while I was still in college.
As a college student, I was keen on owning a nice sports car. So I had a chat with my dad about the possibility of me purchasing a nice car. He told me that he approved of me following through with this decision but strictly on the condition that the car was entirely in my name and I devised a way to pay for it.
Challenge accepted.
My goal was to get a job doing door-to-door sales. The money was good and it gave me an opportunity to experience somewhat of an adventure away from home. Pretty soon after, I came to realize the price required to drive and maintain a nice car.
I can honestly say that I’ve never worked so hard in my life. More often than not, it felt like a daily battle of blood, sweat, and tears – getting door after door slammed in your face isn’t fun. Let’s just leave it at that.
As I saw the remaining balance owed on the car shrinking, my goals turned to obsession, and I became determined to get the car paid off by the end of the summer. In the hard moments, that was the only thing that kept me going but it certainly worked.
The unintended consequence was a fantastic credit report before I was 21 and a feeling of immense satisfaction when I received the title to MY car at the end of the summer. There was tremendous gratification of being so determined to earn more as a way to stay on top of future expenses.
Years later, I still remember that experience very vividly – and yes, I still love driving fast cars! I use this story as a way to teach my kids. Budgeting may seem boring, but financial responsibility makes the world a better place for individuals, families, and communities.
Start becoming responsible with your finances today
More recently I was involved in an employee 401(k) meeting where I heard a quote that really stuck out:
“Live the first ten years like nobody would so you can live the next ten years like nobody can.”
I’ve heard this quote being used before in the context of starting up a business and entrepreneurship, but this couldn’t ring more true when it comes to your personal finances.
It’s all about living within your means now so you can reap the rewards later.
Being responsible with your money comes down to exercising discipline and being able to sacrifice some of those short- term pleasures for long term gain.
The sooner we’re able to start by disciplining ourselves, creating a solid roadmap and financial plan for the future, the better off we’ll be in years to come. Why wait for tomorrow when today is here now?
