11 Things Fiscally Responsible People Do

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Today we’re going to talk about being fiscally responsible. Wait! Don’t run away! The way I see it, this topic should not only be reserved for boardrooms occupied by uptight managers in suits.

Becoming financially-savvy should be the norm amongst people young and old who are committed to achieving financial freedom or general awesomeness.

By that, I don’t mean you should go around initiating talks of being fiscally responsible at the club, beach or with the hobo around the corner, that would be weird. Don’t do that.

However, the sooner you start the easier your life becomes. Luckily, there are things out there to make it easy to get going. Great!

  • Looking for ways to track your income and expenditure? There’s an app for that.
  • Confused about investment options and financial terms?
  • There’s a YouTube video you can watch.
  • Curious about frugal living? Read my post.


What is being fiscally responsible?

Simply put, someone who is fiscally responsible asks “how much will this cost” and “how will I pay for it” when making decisions instead of just spending money and worrying about the consequences later.  

The word “fiscal” gets thrown around a lot in government or big corporate budget discussions, but it also applies to you as an individual. Being financially accountable is a step towards being fiscally responsible.

What is the goal of being fiscally responsible?

Imagine you set the goal of doubling your income and you achieved it… except a year later you were neck-deep in high-interest debt with no savings or investments. Technically you reached your goal but before learning to master your finances, your goal just made things worse. 

For many, becoming fiscally responsible is not so much about having more money but more about learning how to understand finances and to just stop being so bad at managing it. Think about it like this, a responsible babysitter is someone you can trust and confidently leave your babies with, not necessarily the one with the most babies. The same can be said about finances.

You want to create an “equilibrium” where your income lets you pay for all your expenses and set money aside to invest. That means either increase your income or decrease your expenses. Unfortunately, most people have it completely backwards. 

Financial goals differ from person to person, and so, what you aim to achieve by being more fiscally responsible will most likely differ from your friend or spouse’s aim. The goal of being fiscally responsible isn’t always necessarily to be super wealthy and find yourself listed amongst the who’s who in Forbes magazine.

Being fiscally responsible is something that can be learned over time and through practice; once you become responsible with your money, you won’t have so much financial stress because everything is accounted for. In the long run, this could lead to a great deal of wealth and little to no financial stress.

There are countless stories of people who made successful investments and reaped the financial benefits, but because they were not fiscally responsible, they have nothing to show for it today. Sad but true. What makes things worse is that we live in a very materialistic and attention-seeking world where many have succumbed to the pressures of appearing rich.

What is a fiscally responsible government?

Just like with your own bank account, fiscally responsible governments should have more income than spending, pay off bad debts as fast as they can, and set money aside to invest. But governments have some extra factors to consider that people don’t, like that they should never die which makes thier finances special.

Actually, it makes them much like a corporation with an (ideally) benevolent CEO.

They need to aquire funds, have effective budgeting and spending, as well as the appropriate and honest allocation.

However, it goes a step further because of the fact that they don’t die like people do – job creation and infrastructure can create jobs which creates future income tax growth as an ‘investment’.

We often hear that you need to spend money to make money, which often sparks debate on how governments should approach national debt in the most fiscally responsible manner. Some say cutting down on national spending is the way, while the Robin Hoods of the world feel that an increase in spending would raise the bottom and in the end the overall tax income.

The real way to have a fiscally responsible government is of course tricky. I don’t envy any president really. They need to invest in future job growth that will come into play WAY after their ends. Even if they do something bold, you often won’t know if it was intelligent or not for decades

Then if they don’t please people along the way, they get booted and probably can’t even fully enact thier plans. Painful!

Maybe my bar is set low, but I think as long as any government is trying to be more fiscally responsible (over any timescale) and not just out to “buy votes” then it’s a win in my books.

11 ways to know if you are fiscally responsible

1. Do you save your income?

Yes, yes, I know a lot of people are going on about passive income and multiple streams of income, but that’s all pretty useless if you haven’t even mastered the art of saving. Chances are, you’ll blow all that money away and not even know what you did with it. I’m all for saving, regardless of how much you earn. Ideally, try to spend less than 50% of your income.

In fact, saving is by far the most important FIRE skill. You can work yourself to death, but if you fail to save the majority of what you’ve made, you’re really just wasting your time.

2. Have a goal

Not having a goal is a bit like getting into your car without knowing where you’re headed. It just doesn’t make sense. Setting a financial goal will also act as a guide and help you control your spending to better manage your money in pursuit of a fiscally responsible life. Basically, anything that doesn’t align with your financial goal – get rid of it.

3. Track your money

There are so many ways to track your money and your spending habits these days. If you’re the type that’s always on the move, get an app to track your finances. If you’re more old school and still believe in pen and paper, you know what to do. Or if you’re just lazy, get a bookkeeper and financial assistant. As for me, I prefer Personal Capital. (Read my review.)

4. Have you tried to live frugally?

“Does this cost money that I don’t need to spend?” That is the question that should constantly be ringing in your head when you’re pursuing a frugal life. It’s not about going for the cheaper alternative, it’s about completely doing away with the rubbish that you don’t really need to buy or spend money on.

Think of it like a juice cleanse or diet – you start off by making daily changes and adopting new habits, which ultimately become a lifestyle. As kids, we were taught of the difference between a “want” and a “need,” and frugal living requires you to solely focus on the needs to jumpstart your finances.

5. Do you invest?

Does this question make you uncomfortable or guilty? Great! It should. While saving is an admirable starting point, investing is a step further that allows your money to really work for you. There are so many investment options to consider, BUT the trick is to identify the right one, particularly, one that’s best for you and aligns with your financial goals.

The phenomenon that’s doing the rounds right now is Bitcoin. I think bitcoin sucks, try something else.

Read my full reviews of top investing platforms 

6. Are your investments safe or are you gambling?

Of course, investing is a risky thing, otherwise everyone would be doing it if it had guaranteed returns. The mistake a lot of people make is trusting someone else with their finances without being fully informed (i.e. expecting your bank and their advisors to decide what’s best for you). 

I’ve always taken this responsibility on and made a point of educating myself on the various investment options that exist and whether or not they really are as amazing as everybody says they are. Have you thought about the time value of money? Interest rates? EXACTLY! If you’re passing your finances over to someone else, you should at least ask the right questions before committing.

7. Are your investments somewhat liquid?

How many times have you come across tabloids and reports on the rich and famous and what their net worth is? Countless times. You hear all these huge figures which are often mistaken for their current financial health – because that’s what sparks conversation, right? 

While your net worth may be high, if your investments are not liquid, you are basically poor for now. That’s the reality. It gives you a false sense of security and wealth. Your liquid net worth is most important because those are funds that can be easily accessed and can help you acquire more wealth and capitalize on investment options that may arise unexpectedly.

8. Do you have an emergency fund?

This one seems a bit obvious. The truth is, life happens, and while we cannot always foresee it, we have to be prepared and have measures in place. Recessions, pandemics – these are things that we would prefer not to go through because of the financial implications thereof, but they do happen, which sucks!

An emergency fund is a pool of funds specifically reserved for such, to avoid finding yourself in a position where you have to dip into your savings to survive.

9. Is your job secure or tenuous?

Job security is something that a lot of people desire, but when a global disaster happens, it becomes a case of sink or swim. To prepare for the worst, you need to have contingency plans and funds in place. A common mistake that people with permanent jobs make is living hand-to-mouth because of the false sense of financial security that a salary brings. 

Break away from that and commit to being fiscally responsible.

10. Do you have bad debt?

If you’ve racked up a huge credit card bill on things that don’t really matter, deal with that first. The starting step of being fiscally responsible is being honest about your financial standing and getting rid of bad debt.

11. Are you raising financially literate children?

One thing about kids, they will drain your money like crazy if you’re not fiscally responsible. Hands up if you’re a parent and can admit that your children indirectly rule your finances because you can’t say no to them. Thought as much. By being fiscally responsible as a parent, you teach your kids the same and raise them to be financially literate in the process.

Think about it, instead of your kids being those broke tenants that live in your house rent-free, turn them into your biggest cheerleaders, accountability partners and vessels to pour your knowledge into. How do you expect to raise financially literate and fiscally responsible kids if they see you spending frivolously and failing to stick to a simple budget?!

I’ve noticed that for some reason, parents seem to think that their children are not smart enough to understand financial concepts such as compound interest, for example. False. They actually are. Set your kids on the right path and teach them about being fiscally responsible from a young age.

Teach them about investing and delayed gratification by not always giving them everything they want when they want it. Teach them about saving and working for their money by not just giving them money undeservedly. These are little seeds that you plant in your kids to ensure that they can also be smart and useful members of society who understand what being fiscally responsible truly means. 

TL;DR – Being Fiscally Responsible

Simply put, being fiscally responsible isn’t necessarily about being the wealthiest, rather, it is about developing healthy habits to better manage your finances. Getting rid of bad debt, pursuing liquid investments, and living frugally are just some of the ways to go about this. The first step is to be accountable and brutally honest with yourself about your financial standing.

How might fiscally responsible individuals use investments to meet financial goals?

To be fiscally responsible, you should make sure that your income covers all your expenses and leaves plenty to invest. Depending on your goals, you could invest in index funds which offer low-cost and high-yield long-term returns, or you could invest in real estate which would allow for consistent cash flow. 

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3 thoughts on “11 Things Fiscally Responsible People Do”

  1. “Just like with your own bank account, fiscally responsible governments should have more income than spending, pay off bad debts as fast as they can, and set money aside to invest.”

    No. Not even remotely correct. A government is not a person with a finite lifetime, finite time/income potential, and responsibility for a limited number of people/dependents. It is an ongoing enterprise that can prosper more (via tax revenues) when its people prosper more.

    A well-run government should always run a reasonable deficit, representing that it is investing for the future prosperity of its citizens under the reasonable belief that the deficit investing will be more than paid for by larger future revenues (tax dollars) from a more prosperous citizenry. If you want to think of the government as a person, think of them as a perpetual college student/young adult — reasonable student loan debt being the smart trade off for higher incomes in the future, reasonable mortgage debt being the smart trade off for the stability of a home and ability to create wealth through home ownership, etc.

    Or think of government as a business — when that business no longer has the need to borrow money to invest in further growth and instead is accumulating cash (a surplus) and/or paying out dividends (reducing taxes), the business itself is no longer growing (or no longer growing as much as it could/should/would ideally be doing) because if there were growth opportunities out there the business should be spending that cash/borrowing more depending on interest rates to pursue that longer term growth opportunity. (The analysis doesn’t work perfectly here, because too high of taxes and you hurt the economy, but it is undeniably true that cutting taxes rather than spending that wisely on infrastructure/future growth via education and other good sources will/can exacerbate wealth inequality and depress collective prosperity).

    • OK totally fair. I know a lot of what the government does is invest in it’s future income via more income tax so I updated the comment to be more fair to the government :)


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