9 Steps to be Fiscally Responsible

Steve Cummings

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Being fiscally responsible is something that everyone should learn. It is a part of life and it can help you reach financial freedom within your life. We hear about it with the government and politics.

American politics love to talk about being fiscally responsible. You hear it in the news all the time.

Democrats and Republicans always fighting over the deficit and how to have a balanced budget. Every fiscal year is the same. The political parties fight over the federal budget, national debt, and government spending. 

Let’s be honest, the last time we had a budget surplus was at the time of Clinton’s presidency. Yet, we still talk about spending cuts, taxation, and anything else that may relate to the GDP and government spending.

It makes you wonder, how does it relate to us in our personal finance? Let’s see how we can be more fiscally responsible in our personal finances.

What is Being Fiscally Responsible Mean?

Let’s define these terms so we all know what they mean. 

  • Fiscal: relating to money issues
  • Responsibility: it is a moral obligation to act or behave correctly

When we put these two words together, we develop the moral obligation to act or behave correctly relating to money issues. 

This seems quite simple in most lights when you read the words. You may say “yeah that’s me!” If you really dive down. How many of us are truly fiscally responsible?

A fiscally responsible person would save for retirement, stay out of bad debt, and invest for the future. Oftentimes, we fall short. Either we get into debt, lack saving enough for our retirement, or even do not have enough insurance to help us keep our things safe. 

Here are some 9 steps to make sure you are Fiscally Responsible.

1. Set Financial Goals:

Financial goals are a type of goal to help you reach some milestone. Let’s say you are in credit card debt. Your goal would be to get out of this by a certain time and you would strategize to achieve this. 

Setting financial goals is a huge part of being fiscally responsible. Having a plan of knowing where to go is what you need.

Without goals, you may just be wandering aimlessly through life until you realize you have wasted so much time. 

Try to set up some goals for your finances. Think about when you would like to stop working and figure out how much money you may need.

This can be as simple as figuring out your liquid net worth and making goals to hit. Maybe you need 6 figures to live or work on living stingy to help achieve your financial goals. 

2. Creating a Liveable Budget

Budgets can get a bad rap. People will feel they are constrained. Let’s really look at what you are spending.

If you really want to be a fiscally responsible person you must know where your money is going. Tracking your spending is one way to create your budget. Take a month to see where your money is going. 

Then take that spending and create a budget that you can live on. Something that will also give you savings at the end of the month. If you spend way too much on eating out, then cut that part of your spending. 

An easy budget can be the 50/30/20 budget. You can also use google sheets to make a great budget tracking your income and expenses. 

Make a budget.

3. Know Your Net Worth:

This is huge. I have mentioned liquid net worth, but I want you to know what you are worth when I am talking about net worth. It is a way to help with planning. Especially, liquid net worth helps with knowing how many liquid assets you may have. 

Part of planning out your budget and goals is to know what your money situation looks like. Every month, I track my net worth to know where I am going.

Net Worth = Assets – Liabilities


  • Real Estate
  • Cash
  • Stocks
  • Investments


  • Student Loans
  • Credit loans
  • Auto Loans
  • Mortgage

I write about it to help show people it is possible to start off small, and as your assets grow your net worth will start to grow faster and faster. 

It is always best to know where you are to know where you want to go. Let’s take some time and figure out your net worth.

4. You need an Emergency Fund

I cannot stress this one enough. An emergency fund can really save you. It gives you peace of mind and allows you to have less stress. 

An emergency fund is enough cash to cover you for at least 3-6 months. I would rather have 6 months, but even having 3 months can really give you enough cushion to start investing and a little bit every month. 

Please take a moment to try to get enough cash reserves for a 3-6 month emergency fund. This will truly help you in case of some sort of emergency may happen.

Classic Emergencies:

  • Loss of job
  • Unknown Medical Expense
  • Car accident/ car repair
  • Worldwide pandemic

Please take time to make sure you have an emergency fund

5. Time to get Rid of Bad Debt

Bad debt can be defined as debt with high interest rates that do not bring much economic value. 

  • Credit Card Debt
  • Payday loans
  • High-interest student loans

Good debt would be a mortgage that is at a low interest rate. This allows you the option to choose between investing or paying off your debt.

It is time to get rid of this bad debt. If you truly want to be fiscally responsible you need to get rid of bad debt. Credit card debt is one of the worst ones. The high interest can really kill your finances. 

I know that debt can be stressful and debilitating. It is time to make a plan and knock some of this out. You do need an emergency fund to help you out as a backup so you do not fall back into the cycle. 

Then you need to use a good method like the debt snowball or debt avalanche method. These can really help you get out of debt and stay out of debt.

6. Invest for your Retirement

One big thing about being fiscally responsible is investing in your retirement. We cannot work our whole lives. Our bodies and minds are not meant for that. 

Having a retirement is a way to secure your future. If you do not have money saved up for your retirement you may be left without any money to live off of for the rest of your life. 

This is not something that should occur. We need to be proactive and make sure we secure a future for our days when we are older. 

One way is to make sure to invest in your retirement accounts. I know in the U.S. you can have an IRA or your work may offer a 401k.

These are great tools to help secure your future. Just $16 a day in your IRA can make you a millionaire in 35-40 years. That is money you can count on in retirement.

7. Invest, Invest, Invest:

I know I just talked about investing for your retirement, but you should also continue to invest money any way you can. 

Life does not begin when you retire. Sometimes having the security to invest in stocks, real estate, and other assets can really set you up to obtain financial freedom earlier in age. 

Plus the sad thing is that we work for most of our lives just to live the last 10-15 years of our lives. It does not sound appealing to me, so I work towards trying to invest more money to retire early. 

You may not believe in retirement early, but the investments you make today can really enhance your life in the future.


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8. Create Generational Wealth

Most of the steps revolve around you. If you truly want to be fiscally responsible you need to also look for increasing wealth for your family as well. 

There are so many avenues to help save for your children or even the children of your family. 

In the U.S. there is a 529 plan to help save for a child’s college education. If you want you can help invest for the future of a child’s education. 

There is also the UTMA or a custodial account in the name of a child. This can give the child a first look into investing. As the child grows older the investments will also grow giving the child options and opportunities when they become an adult. 

That is one of the greatest things for a family. Knowing that you did what you could to help secure their financial future.

9. Insure Your Assets

Insurance is not something I particularly talk that much about. The thing is we all need insurance. 

Individuals need health insurance. Most of the developed world has government health insurance, which keeps them from going bankrupt.

In the U.S. the citizens are not that lucky. Health care costs can really bring you into financial ruin. So you need to grab insurance and make sure to stay healthy. 

Insurance can also cover homes and automobiles. We need to protect our assets. Homeowners’ insurance can help prevent any catastrophic accident from being a financial ruin. Auto insurance helps to keep your mode of transportation in working ability. 

The last type of insurance is of course life insurance. My opinion would be to not buy whole life. Go after term life insurance.

Life insurance helps to provide a safety net for you dependents you may have in your life. As a husband, I want to know that my wife can take care of any costs if I were to pass away sooner than expected.

It is something to give peace of mind to your family.

Some Last Thoughts:

We all need to be responsible for our money. It really starts with these steps that I have laid out for you. 

Make sure to:

  1. Set Financial Goals
  2. Create a Budget
  3. Know your Net Worth
  4. Make an Emergency Fund
  5. Get rid of Bad Debt
  6. Invest in your Retirement
  7. Invest even more
  8. Create Generational Wealth
  9. Insure your Assets

This is part of being responsible. Write these down. Make a plan. Take some action. It is never too late to make a difference in your life and the lives of those around you.

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” Spend less than you make, stay out of debt, and invest the rest”

2 thoughts on “9 Steps to be Fiscally Responsible”

  1. To me the most important one is to start tracking your net worth. If you do that, the rest will eventually fall into place. I would also set some goals too, at a bare minimum, but if you do just those two little things, you’ll start to get some wins that will begin to compound.

    • I 100% agree with you. With the Net Worth tracking you can really make out a plan, and each step is a part of that plan. The goals will then help create the plan. Then we can let the compounding begin.


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