Financial irresponsibility is easy.

If you want to find ways to blow your money, the internet is absolutely filled with them. Amazon (AMZN) - Get Report can help you spend thousands on gadgets you’ll neither use nor need. Late-night TV still runs infomercials based on the idea that blankets and zippers have the failure rate of a temperamental howitzer. Treat retirement accounts like scams for people who don’t lead a rock 'n' roll lifestyle.

And if all else fails, there’s always tequila.

It’s easy to be financially irresponsible. Financial responsibility is harder.

What Is Financial Responsibility?

This is a more complicated question than it seems.

It’s easy to write off financial responsibility as “live within your means” or “stick to a budget.” And these are aspects of a financial responsible life, to be sure.

There’s more to it, though. Financial responsibility is ultimately about three things:

  • Taking care of yourself;
  • Taking care of the people who depend on you;
  • And keeping your promises.

This means paying your own bills and living on less than you earn, but it also means keeping an eye on your obligations. It means not making commitments you can’t keep and, perhaps more than anything else, it means making sure that you plan for the people who count on you.

Entire books have been written on the subject of financial responsibility. While we aren’t ready to go into that much detail, we can touch on the most important points. Because like many things in life, just thinking about how to manage your money is a good first step.

Budgets

A good budget is the cornerstone of financial planning. Learning to budget isn’t just about downloading an app or counting your pennies, though. The first step of any financial responsibility plan is often the hardest:

Learn Where Your Money Goes

If you want to start taking real control of your finances, you need to understand exactly what you spend your money on. Sit down at the end of the month and go through your records with a fine tooth comb. Look at your banks statements and credit card bills, and keep track of your cash spending too. We’re not saying the occasional $4 latte is going to ruin your credit rating, but the nickels and dimes do add up.

It’s easy to lose track of small spending, interest payments, subscription services and the like. Take a careful accounting to see where your money goes each month. Then:

Build a Budget for Your Lifestyle

Building a budget is about more than just setting a spending number. It’s about making a plan.

Like dieting, many people struggle with budgets because they fail to make this a lifestyle. They go on binges and crashes, spending heavily on Christmas, then living on bread and water in January; traveling freely in June, then regretting it in July.

Don’t do that. Create a budget that works for your life, not just because it sounds good but because if feels good. If you like to travel, make sure your budget accounts for those adventures. If you enjoy meeting friends for a beer on the weekend, even the federal government allows its employees entertainment expenses. Keep your numbers realistic to both how you can live and how you want to live, otherwise you’ll find it far too easy to blow off.

Debt

Live within your means. While financial responsibility may not end with this idea, it certainly begins with it. Taking control of your finances means spending only the money you have.

Now, don’t get us wrong, that doesn’t mean that debt is a bad thing. Debt can be an extremely powerful financial tool IF managed wisely. A mortgage can help you build value and save money over the long run. Few people can afford to pay cash for a decent car, and student debt became a fact of life once the baby boomers decided to pass their share of responsibility for the nation’s future onto their children.

Good debt management is essential to financial responsibility. Among other key practices, this means:

Avoid Consumer Debt

Credit cards have many useful features. A good rewards card can be a powerful financial tool, and making regular payments is arguably the best way to sustain a credit score over the long term. However as valuable as they can be, credit cards can also cost you money and drag down your credit score if used improperly.

If at all possible, never use a credit card unless you can pay it off promptly. Absolutely never use it to make purchases you can’t immediately pay for and don’t need. We aren’t judging anyone here. Times can get tight and that credit card is sometimes all that gets you to the end of the month. But too many people apply that logic at Best Buy (BBY) - Get Report or on vacation rather than at the grocery store, and it’s a practice to watch out for in yourself.

Know Your Debts

Do you really know what you owe? Or do you just make payments as the bills come in and try not to think about it? For many people, especially if you owe student loans, the answer is often “No” and “Yes,” respectively.

Don’t Do That

Debt is intimidating, especially in the figures that millennials and Generation Z members have to face. But keeping track of it is the first step to staying on top of it. So take a deep breath, maybe open a beer, and every few months check your balances and interest rates. You’ll be better off in the long run.

Savings and Retirement

There’s an old saying in financial circles: Pay yourself first. What this means is that your financial planning should always focus on the things you absolutely need: a roof over your head; food on the table and gas in the car; and monthly contributions to your retirement and emergency funds.

Before you dedicate money to any negotiable matters, focus on this first.

Emergency Savings

The rule of thumb is that if at all possible you should have between three and six months’ worth of expenses on hand in case of emergencies such as sudden job loss or unexpected medical bills. This isn’t always practicable, but if at all possible you should try to meet this standard. Top up your emergency account as necessary and do everything you can not to touch it.

It might feel lousy to watch the summer go by with you not in Puerto Rico and a big pot of money just sitting there in savings, but think how much lousier it would feel to watch a layoff letter arrive without it.

Retirement Fund

Max out your retirement contributions. Just do it. Don’t ask questions. Take the maximum contribution your employer allows and build the rest of your budget around that.

It might seem unnecessary today, but your 70s are coming up faster than you’d think. Once you see friends and loved ones begin to retire, you’ll desperately wish you had planned as well as they did.

Obligations

As we discussed up top, financial responsibility is about more than simply paying for yourself. It’s also about taking care of the people who depend on you.

Don’t Make Commitments You Can't Keep

A little over a year ago I signed a contract subleasing my apartment to a woman who had just taken over as the head of a local nonprofit. She and her family were moving to Ann Arbor while my wife and I were moving out, so it seemed like an excellent fit. Then she changed her mind. She and her husband got to town, decided they didn’t want our apartment anymore, and announced that there was nothing I could do to change her mind.

Do Not Do This:

It doesn’t matter how large or small, never make a financial promise you don’t intend to keep. Don’t borrow money unless you are certain you can pay it back. Don’t hire someone unless you have the money sitting in your bank account. And never, ever assume financial responsibility for someone unless you have the means to do so.

This comes up more often than you might think. In fact, we all do this kind of thing often. We make a promise to someone else because it’s easier than saying no, or because they catch us in a fit of generosity. This is fine if you intend to follow through, but only if. Otherwise you will create more problems by breaking your promise than if you’d never made it at all.

Worse, not everyone will simply let you off the hook. To this day I have a $7,000 lawsuit sitting in my desk drawer. I haven’t decided whether to go back out to Michigan and collect my money, but there is one thing that is certain: You should never put yourself in the position to find out from someone else.

Prioritize the People Who Count on You

When you build your budget, prioritize two things: First, your immediate needs. This may sound selfish, but the truth is that you’re no good to anyone if you go hungry, leave an infected tooth untreated or let your car get repossessed. Keep yourself functional and available and spend the money necessary to meet those needs. (This includes your retirement contributions, otherwise you’ll become someone else’s problem in 40 years.)

Then prioritize the people who depend on you. If you have children, aging relatives, a nonworking spouse or any other financially dependent individuals, take care of them before you prioritize any nonessentials. Buy your kid that bike before you budget yourself a new pair of shoes. Make repairs to your grandparents’ home before moving into a larger apartment.

Financial responsibility is about more than just income-exceeds-expenses. It’s about keeping your promises.

Income

Tend carefully to your income.

Earn What You Need

Often articles like this focus on controlling debt and spending as the only pillars of financial responsibility. This is important, certainly, and far more easily within your control. You can more readily avoid a night out with friends than you can arrange to get a raise at work.

But your income is an important part of this plan too.

Once you make your budget, look at the line items that you really wanted. Where did you have to make compromises, and what about it feels uncomfortable to you? This is where you should begin trying to make more money. Align your income with your needs and wants, and if that doesn’t happen, work to build your career in that direction. It is a far more comfortable long-term plan than simply cutting to the bone and hoping for the best (even though until those paychecks start coming in, Plan A will have to be the budget cuts).

Keep Your Income Growing

I’ll let you in on a personal confession. I have been self-employed since early 2012 and for much of that time I allowed my income to stagnate. I worked hard, got my earnings to a place where my wife and I felt comfortable, and then got complacent. As a result, our standard of living, while fine, did not noticeably increase for more than five years.

Don’t make the same mistake. Only in the last few years have I begun paying attention to that and doing the work necessary to grow my income year after year. 

Focus on building your income each year. Talk to your boss about your financial goals in your current job, and about what it will take to begin meeting them. If you don’t think that’s possible where you are, begin making the long-term plan that will take you to where you need to be.

Income is a slow solution to financial responsibility, but also the most sustainable in the long run. Growing your personal wealth is something that takes time and dedication, but the truth is that sometimes you just need more money. Don’t be afraid to go out there and get it.