July 14, 2024

Sensible budgeting and financial management may sound boring, but it is regularly the cause of relationship breakdown, arguments and acrimonious divorces. It can even lead to relatives killing someone to get their hands on an insurance payout or inheritance.

But simply confronting the profligate spender is not going to get anywhere. They are likely to deny there is a problem, but if there is month left at the end of the money, then there obviously is. Maybe they need help to reassess their spending priorities, to find a better paying job, manage their debt better, or even sell off some of the things they have bought in order to make some of the cost back. To cover a short term lack of cash, there is the option of a payday loan, but even these can lead to financial irresponsibility if there is no clearly thought out repayment plan in place.

Other examples of financial irresponsibility include backing a badly thought out business venture. Crowdfunding is a popular way for entrepreneurs who do not have capital to raise money by promising backers a reward for their investment. Backers should, however, be wary and read the small print, as some projects are better thought through than others and will have a better chance of delivering the goods. A less risky way for business owners to raise capital may be to obtain a loan instead to grow their business. Remortgaging their house is not recommended, as if the venture fails, there is the potential to lose the property too.

Having the latest model of mobile phone, TV or gaming system may be very tempting, but this is an expensive hobby. At least systems and games can be sold on once the thrill is gone. The same goes for impulse purchases of clothes, shoes and handbags. Auction sites are invaluable for finding these must-have items for a low price, and for selling on those which don’t work out. Reselling has become a full time side hustle business for many needing some extra cash over and above their existing job, and decluttering not only helps clear space, it also raises funds which can be used to pay down debt, save for a holiday or build up a savings cushion.

Professional help for financial irresponsibility is available too. There are debt management companies who can help manage repayments, consolidation loans which bundle up a number of payments and typically offer a longer repayment time with lower monthly installments, independent advisors and self-help articles online to help individuals dig themselves out of a hole with simple, sound advice.

For some people, simply being able to find a better paying job may be the key to making the money last to the end of the month, but earning more money can lead to the temptation of additional spending, so those with a new promotion should be careful to mind their increased income and make it work for them.

So financial responsibility is not always easy. But for those who recognise the signs, either in themselves or others, there are ways out of it. Plus, help is always available and should never be turned down.

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