# What is the definition of being "financially responsible"? **URL:** \ **Category:** Great Debates\ **Created:** [February 14, 2010, 5:24am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931 "2010-02-14T05:24:17Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [February 15, 2010, 3:49am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/41 "2010-02-15T03:49:02Z")
> [@sinjin](#): > > Nope, just calling a spade a spade. OK. The government offered cheap financing for education, and I took it. That fact doesn’t alter anything I’ve said, or make me a hypocrite, or anything like that. I invite you to make a really shitty argument to the contrary. ---
**Author:** ![sinjin](https://avatars.discourse-cdn.com/v4/letter/s/ebca7d/32.png) [@sinjin](https://boards.straightdope.com/u/sinjin)\ **Post date:** [February 15, 2010, 3:59am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/42 "2010-02-15T03:59:15Z")
> [@Rand\_Rover](#): > > OK. The government offered cheap financing for education, and I took it. That fact doesn’t alter anything I’ve said, or make me a hypocrite, or anything like that. I invite you to make a really shitty argument to the contrary. In another thread you posted this: > [@Private Sector Solutions Part I: Social Security](https://boards.straightdope.com/t/private-sector-solutions-part-i-social-security/528860/36): > > elucidator and Der Trihs, do you think it would be OK for you to knock down your neighbor’s door and take what you want from them? Or do you think that that would be a bad thing to do? So it was OK for the government to knock down your neighbor’s door and take their money and give it to you for your education. Do you think that was a bad thing to do? What’s the dif? ---
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [February 15, 2010, 4:05am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/43 "2010-02-15T04:05:05Z")
How about you read post #38 of this thread again and get back to me. ---
**Author:** ![sinjin](https://avatars.discourse-cdn.com/v4/letter/s/ebca7d/32.png) [@sinjin](https://boards.straightdope.com/u/sinjin)\ **Post date:** [February 15, 2010, 4:09am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/44 "2010-02-15T04:09:40Z")
> [@Rand\_Rover](#): > > How about you read post #38 of this thread again and get back to me. So you’re just an opportunist? Spade. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 15, 2010, 4:31am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/45 "2010-02-15T04:31:40Z")
> [@China\_Guy](#): > > let’s not be literal. Credit cards as a cash management tool are fine, even short term cash flow tools, etc. Pretty dumb for financing a colledge education, that kitchen remodl and the dream european vacation. Good. I was just modifying the advice from “never get a credit card” to “never pay interest on a credit card” which is what you appear to have meant. > [@](#): > > Shibboleth - the US and global economy would adjust perfectly fine to a lower consumption level. We’ll see. But I think managing a downward consumption trend took political will that the Bush administration didn’t have. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 15, 2010, 4:36am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/46 "2010-02-15T04:36:15Z")
> [@Rand\_Rover](#): > > Looking just at investment, the most basic aspect of financial responsibility is not putting all of one’s eggs in one basket. That is what I was getting at with the quote in the OP. In the current mess lots of baskets had cracked eggs. Oddly, my father, out of a hatred for taxes, wanted all his money in municipal bonds, and didn’t want to hear about diversification. (He’s 94 now, so not investing for the long term.) He did pretty good - much better than my diversified portfolio. You never can tell. ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [February 15, 2010, 4:39am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/47 "2010-02-15T04:39:08Z")
> [@Aspidistra](#): > > But as far as political philosophy goes, this really leads me to quite the opposite end of the spectrum. I know it’s possible to live a comfortable prosperous life voluntarily choosing to spend a lot less than my peers, and I have very little patience for people on 6 figures wringing their hands about the horrors of high taxation and how terrible it is to have “their” money (which they wouldn’t be in a position to earn at all if it weren’t for the whole structure of society around them) being used to support their society. I also know that life is random, and shit happens, and getting the money to deal with some things is simply impossible for a lot of individuals to do by themselves. Getting cancer, for instance. Or providing good care for a severely handicapped child. I’m not getting the difference here. If you work, save and plan ahead, even cancer or a severely handicapped child can be paid for by oneself rather than expecting that society will pick up the tab. Both of my inlaws & paternal grand parents all died of cancer and all paid for the deductibles, co-pays and all else themselves, even tho none was even close to rich. Like **Bricker** said, if you aren’t spending more than you earn, you will have a cushion to fall back on should something happen. If people would quit expecting that “the government” or “society” will cover for them, we will all pay less in taxes and be more able to take care of ourselves. > [@MandaJo](#): > > I think it looks different at different ages. For one thing, for women, especially, there is the whole biological clock thing going: you are already supposed to wait until you have a college degree and an established career before you start a family. I didn’t do the child thing so I’m probably missing something obvious here, but if a woman plans on having children, why is she getting a college degree and an established career first? She is going to have to leave that career and not use that education while raising the kids, isn’t she? Unless she plan on raising the kids in daycare, at which point I do wonder why she had them in the first place. > [@](#): > > I mean, we are talking about a standard in which only people of significant income _early in life_ can have children responsibly. I’m not sure that’s a bad thing. I know that having kids is a strong drive in most people, but I also think we as a society need to get beyond the idea that anyone who wants to have kids can have them. And if they can’t afford to raise them, we’ll pay for it. That is getting _very_ expensive, and it can’t be good for the kids themselves. > [@Rand\_Rover](#): > > They also pay cah for car repairs and maintenance, both of which are typically more expensive in a car that one can pay cash for. Huh? We paid cash for both of our vehicles and neither has ever cost us in repairs as much as a monthly payment would. Maintenance you are going to have to pay for whether you are making car payments or not. > [@](#): > > If I were to pay for it in cash, then I would just be pushing all those monthly payments to the first month. You are also avoiding all the interest payments. > [@](#): > > So, anyway, bottom line is, I have an amount I’m willing to pay each month for “owning a car,” just like there’s an amount I’m willing to pay each month for “eating lunch” and “having cable.” . If your personal income and savings are high enough that you can afford to pay for everything, including your monthly car payment, for a year with out having a job then there is certainly no problem with you paying interest on your car purchase. However, most people buy cars on time because they cannot really afford the vehicle they want and the only way to get it is on time. This is how people get eaten up in leases as well. > [@](#): > > I think it’s perfectly OK for someone to take whatever the government wants to give them, even if I think the government shouldn’t give that in the first place. “The government” isn’t paying for whatever it give you, you know… ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 15, 2010, 4:39am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/48 "2010-02-15T04:39:48Z")
> [@suranyi](#): > > I believe you’re thinking of Charles Dickens’ quote from "David Copperfield: > > “Annual income twenty pounds, annual expenditure nineteen > nineteen six, result happiness. Annual income twenty pounds, > annual expenditure twenty pounds ought and six, result misery.” Thank you, that is it. My memory was so far off on the words that Google did not help. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 15, 2010, 4:46am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/49 "2010-02-15T04:46:36Z")
> [@Bricker](#): > > Yes, that’s true. But there was no guaranteed investment I was aware of that paid as high an interest rate as I was getting. I could have rolled the dice, and in 1996, I probably would have won. > > In 1999, though, probably not. I’m not a financial genius, so I stick with what I know. If someone else’s skill set allows them to make more money by buying a car with a load and reliably investing the cash they would have spent, great. I don’t have that skill set. FYI, when I was buying my new car a few weeks ago, Toyota quoted a 9.9% interest rate. When they saw my credit rating (they had to run a credit check to believe that our check wouldn’t bounce :rolleyes: ) they knocked it down to 5.5% I don’t know of any safe investments that get that kind of return these days. I carefully tracked repair expenses, and compared them against the equivalent of monthly payments. I switched when the repair cost went above my threshold. I wound up donating it. I’m with you. Plus, unless you are burning lots of gas, the carbon footprint for a new car is a lot greater than an old one getting reasonable mileage, and mine was getting 25 - 30 mpg until the end. So I’m with you. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [February 15, 2010, 5:39am UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/50 "2010-02-15T05:39:44Z")
> [@curlcoat](#): > > \ > I didn’t do the child thing so I’m probably missing something obvious here, but if a woman plans on having children, why is she getting a college degree and an established career first? She is going to have to leave that career and not use that education while raising the kids, isn’t she? Unless she plan on raising the kids in daycare, at which point I do wonder why she had them in the first place. > \ The myth of modern women having it all is dying a very hard, slow death. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [February 15, 2010, 1:14pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/51 "2010-02-15T13:14:07Z")
> [@Cat\_Whisperer](#): > > The myth of modern women having it all is dying a very hard, slow death. Having a job and a kid is hardly “having it all.” ---
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [February 15, 2010, 3:27pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/52 "2010-02-15T15:27:00Z")
> [@sinjin](#): > > So you’re just an opportunist? Spade. In other words, you are unable to come up with an argument, so you are posting insults in GD. ---
**Author:** ![dre2xl](https://avatars.discourse-cdn.com/v4/letter/d/34f0e0/32.png) [@dre2xl](https://boards.straightdope.com/u/dre2xl)\ **Post date:** [February 15, 2010, 3:36pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/53 "2010-02-15T15:36:59Z")
> [@Leaper](#): > > So I ask: what is your definition of being “financially responsible” on an individual level? What do you need to do, think about, and prepare for? To answer the OP’s original question: have disability and health insurance (I realize this isn’t always possible). Have life insurance if you’ve got dependents, and property insurance if you’ve got a house. Have 6-18 months’ savings. Beyond that, just continue investing into retirement and paying off debts. I would argue that there is amazing freedom and security in paying off debts that extends further than the “math on paper” and results in richer rewards – mostly in the form of being freer to take risks with profession and salary that one can’t do with a 400K mortgage. If nothing else, pouring every single penny into debts has taught me a lot about being content on less. ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [February 15, 2010, 5:18pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/54 "2010-02-15T17:18:52Z")
> [@Cat\_Whisperer](#): > > The myth of modern women having it all is dying a very hard, slow death. Very very few people can “have it all”, since that requires a very large amount of money. The rest of us have to make choices and compromises, which is a giant step towards being financially responsible! > [@dre2xl](#): > > Beyond that, just continue investing into retirement and paying off debts. I would argue that there is amazing freedom and security in paying off debts that extends further than the “math on paper” and results in richer rewards – mostly in the form of being freer to take risks with profession and salary that one can’t do with a 400K mortgage. If nothing else, pouring every single penny into debts has taught me a lot about being content on less. I totally agree with this! Having very little debt is an amazing feeling, and tends to repeat itself - when I think about buying something that I’d have to charge, 99% of the time I don’t buy it. Very few purchases equal the feeling of being able to go to the mailbox without having to worry about what bills might be in it. 🙂 ---
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [February 15, 2010, 5:57pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/55 "2010-02-15T17:57:43Z")
But the amazing feeling of having very little debt can actually cost money to obtain. For example, I could pay off my student loan debt if I wanted to, but it’s only at 2 percent interest. I’ll likely make 10 percent in the market over the long term. So, it would be nuts to take money out of the market to repay the debt–that amazing feeling would cost a lot. ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [February 15, 2010, 7:34pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/56 "2010-02-15T19:34:51Z")
> [@Rand\_Rover](#): > > But the amazing feeling of having very little debt can actually cost money to obtain. For example, I could pay off my student loan debt if I wanted to, but it’s only at 2 percent interest. I’ll likely make 10 percent in the market over the long term. So, it would be nuts to take money out of the market to repay the debt–that amazing feeling would cost a lot. You’ll “likely” make 10 percent? I know almost zero about the market - how likely is that likely? ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [February 15, 2010, 7:52pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/57 "2010-02-15T19:52:02Z")
> [@Rand\_Rover](#): > > But the amazing feeling of having very little debt can actually cost money to obtain. For example, I could pay off my student loan debt if I wanted to, but it’s only at 2 percent interest. I’ll likely make 10 percent in the market over the long term. So, it would be nuts to take money out of the market to repay the debt–that amazing feeling would cost a lot. That’s true. Of course, as you readily acknowledge above, people are willing to pay for certain experiences. For example, in apparent contrast to my austere claims above, I like to play blackjack. Now, I view blackjack as, ultimately, a losing financial proposition. But I make enough money to occasionally (once or twice a year) indulge this joy. I put aside the same chunk of change for blackjack as I might spend on an evening at the opera for me and my wife. And I enjoy it, much as I enjoy the opera. The only difference is: never once have I left a performance of Le Nozze de Figaro and had the usher slip $300 in my pocket. I do end up leaving the card table up in winnings from time to time. So if someone enjoys the feeling of being debt-free, and is willing to pay a slight premium (the loss in opportunity cost for his capital) then it doesn’t seem crazy. I acknowledge that your method is more financially sound. ---
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [February 15, 2010, 8:07pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/58 "2010-02-15T20:07:05Z")
> [@curlcoat](#): > > You’ll “likely” make 10 percent? I know almost zero about the market - how likely is that likely? The stock market has returned about 10 percent in every rolling 20-year period since the Great Depression. So, pretty damn likely (despite claims all the time that “but now is different . . .”). Bricker, we’re on the same page. I just have to bring all this up in these discussions because it irks me when people believe that not having any debt is a prerequisite to being financially responsible. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [February 15, 2010, 8:09pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/59 "2010-02-15T20:09:37Z")
> [@Bricker](#): > > The only difference is: never once have I left a performance of Le Nozze de Figaro and had the usher slip $300 in my pocket. I do end up leaving the card table up in winnings from time to time. In fairness, there was an unfortunate episode in the restroom during the intermission of Rigoletto. But that was a total misunderstanding. ---
**Author:** ![Hodge](https://avatars.discourse-cdn.com/v4/letter/h/5f9b8f/32.png) [@Hodge](https://boards.straightdope.com/u/Hodge)\ **Post date:** [February 15, 2010, 8:12pm UTC](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931/60 "2010-02-15T20:12:19Z")
> [@curlcoat](#): > > You’ll “likely” make 10 percent? I know almost zero about the market - how likely is that likely? Good question. I think long-term returns of 10% are certainly possible (esp. if you factor in the 30% to 40% market bounce of the last year) in the long run but, IMHO, I don’t think it’s very probable. I’d say 6% to 8% is more likely and possibly even less if we’re stuck in a long-term range-bound bear market. Depends on the time-frame. The longer it is, the better the chances. That said, I agree with **Rand Rover’s** overall point: Not all debt is bad. I’ve personally removed a small amount of equity from my house in the form of a HELOC in order invest in some high quality preferreds and dividend paying stocks. That’s taking a risk, but a relatively small one and worth taking in view of the likely returns. It’s all about an individual’s risk tolerance. Now, if I had used my house as an ATM and taken out that loan to buy an SUV or put in a home-theatre (which I really want to do some decade), then THAT would have been irresponsible. [Previous page](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931.md?page=2) [Next page](https://boards.straightdope.com/t/what-is-the-definition-of-being-financially-responsible/528931.md?page=4)