To be financially responsible requires a few simple steps and procedures that include being aware of the power of money and being responsible with money. This also includes buying stocks, saving money spending money and most importantly making smart all around decisions.

Being responsible with money all falls under the category of making smart decisions around how I choose to spend my money. Will I only buy things that have no value? Will I spend my money only on the things I want or will I be able to balance these decision and find a way that I can do both. I like nice things and see myself living well when I become an adult. I want to be able to buy what I want, whenever I want. So balancing life between the things I want and need is how I can be successful in being financially responsible.

Before buying stocks it’s important to research the stock market. Finding a company to invest in is tricky and looking at the annual financial reports to see how much share they have grown or how much share they have lost. Buying stocks can bring you from rags to riches but can also bring you from riches to rags especially in this turbulent economy. That’s why it is important to know the market before investing and to research information on the company or industrial you choose to invest.

Finally, it’s important to be financially responsible because your success in life depends on it!

There are many ways that financial issues can affect your personal life. If you go around spending all of your money, then you would have no more money to use on clothes, food, utilities, and your house. Also, if you were planning on getting a gift for a family member, then you would have no money left because it was irresponsibly spent. In addition, knowing how to budget your money can help you not spend too much of your money on things that you want and more money on things that you need. Lastly, being personal life because you must spend money on things that will help take care of your self. If you are sick, then you must buy some medicine or you endanger yourself and others around you. Your presentation is also affected by whether or not you are financially responsible because you need to buy deodorant, soap, shampoo, mouthwash, etc. But if you don’t have the money to buy these things, then people assume that you are not well kept.

Another reason that it is important to be financially responsible is that you can be rewarded just for being responsible with your money. For example, if you keep your money saved in the bank without spending it, then you can gain interest over time and have your bank make money for you just for letting them use it. This is safe because the FDIC protects your money in the bank up to $250,000. Another way that you can be rewarded for being responsible with your money is that you can reward yourself (in moderation) by buying things that will contribute to your entertainment and are not necessary to continue to be successful. One last way that you can be rewarded by being financially responsible is that you have money to put aside for safety. This includes an emergency fund that you can save or buying yourself insurance against injuries, car accidents, flooding or fires.

Being financially responsible is one of the keys to being successful in life. It is not easy, but with time, effort and willpower, you can enjoy all of the benefits and rewards of being wise with your money. Financial issues are one of the biggest issues that our nation faces today, but if we know our facts and use money wisely, then Americans can find a way to help others while still enjoying their own financial success.

Let me give you an example. I recently discovered much to my dismay, that 21.7% of African American households are “unbanked,” while 31.6% are “underbanked,” compared with 3.3% and 14.9% of white households, respectively. What does this mean? As a member of the unbanked, you’re walking around without a checking or savings account. The underbanked rely primarily on nonbank money orders, check-cashing establishments, and payday loans to conduct transactions.

By refusing to use traditional banking services, a sizable segment of our community is accepting what I consider a form of second-class citizenship, relegating themselves and their families to a financial underclass. Without access to checking and savings accounts or credit and debit cards, engaging in basic activities such as renting cars and booking hotels becomes difficult—if not impossible. Moreover, the inability to establish a solid credit rating derails any chance of buying a home, the cornerstone of wealth-building.

Many avoid financial institutions for one reason: fear. Last year’s financial crisis provided some with an excuse to maintain their outmoded mattress finance mentality. But the Federal Deposit Insurance Corp. has insured checking and savings accounts for 76 years (the coverage limit for depositor accounts currently stands at $250,000), and not one depositor has ever lost a cent. Moreover, you have to ask yourself whether a major bank has a better chance of going out of business than the local check cashing store.

I know some of you may believe this issue of being unbanked doesn’t have anything to do with you. After all, those who fall in the unbanked category reside in relatively low-income households—at least 71% had annual earnings of less than $30,000. But this money management phobia and lack of discipline is endemic across economic stations. For instance, Insight Center for Community Economic Development reported that 42% of whites invested in an IRA or Keogh plan for retirement versus a mere 7% of African Americans. And the Ariel Education Initiative and consulting firm

Hewitt Associates found that African Americans overall were more than 10 percentage points less likely to participate in 401(k) plans than were their white counterparts: 66% of blacks invested in their company programs compared with 77% of whites.

We must stop this madness. On several levels, many of us have sabotaged our prospects to achieve multigenerational wealth. Do we really want to leave these bad habits as our legacy to the next generation?

Each of us must renew our commitment to financial literacy. That’s why for years I’ve charged our editors to beef up our personal finance coverage through Wealth for Life. I wanted to ensure that we served our audience at every stage of their personal and professional development, from a college graduate trying to devise a financial program to a retiree seeking to refine a comprehensive estate plan. You see, individuals must learn the basics—the practicality of saving, the power of compounding, and the advantages of smart consumerism—as much as they need to gain a full understanding of economic indicators and market dynamics.

Even with the fragile economy, African Americans today have more education and earning potential than previous generations. Our circumstances may be pressing, but they are far from hopeless. We have the tools and intellect we need to advance. We must embrace the fact that lifelong financial literacy leads to empowerment. Wealth for life must be our way of life.

By: Earl “Butch” Graves Jr. , CEO,  Black Enterprise

Via:  Black Enterprise

2) Have Cogent Conversation. Let them know what expenses are and how they are paid. It’s okay to talk about the bills–mortgage, gas, landscaping, food, etc. Start talking as early as possible: educate, inform and empower.

3) Parents Overcome Your Personal Shame. “It’s okay to admit you are struggling. Empower your child with the family financial plan, which builds a stronger and smarter family. Lamb tells the students, “be the financial leader of the family and take the lead.”

4) Stop Being A Beggar. Ask your mom/dad how you can earn money? This is how the world will treat and perceive you. Earn what you deserve and desire. Money is power and value.

5) Understand The “Need” and ‘Want” Concept. The lines for these words are often blurred. Ex: You think you “need” a X-Box at 12 because it’s tied to your identity; you “need” he latest sneakers for $150, however, it only cost $2 to make. What is the value? “Parents must give their children real examples they can understand to make smarter choices. Lamb preaches, “If they saved $2 for everyday of their life they would have a healthy nest egg as an adult.”

Desperate to make her hair grow back, Jasmine researched and experimented with organic products, and stumbled onto a formula which helped her hair grow back. Word spread throughout her community, landing her a spot on Oprah and a deal with Whole Foods Market (which carries her line of bath salts). She has recently negotiated a deal with Walmart – all before the age of 18.

“My mom was like, ‘Maybe you can start the business when you are 20 or when you get out of college.’ ” Now, Archer is bringing in six-figure sales and has customers as far away as Ghana, Switzerland, Indonesia and Iceland.