Fiscal Management and Responsibility

Essay by jrabbit24University, Bachelor'sA, June 2009

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In our daily lives, we must learn to make financially sound decisions based on many different factors. Learning what one can and cannot afford is one of the most challenging lessons life teaches. Learning how much one can afford to spend on a car or house or something as simple as how much is in the food budget for the week is something many struggle with and often times the wrong decision is made based on wants rather than needs. There are many different resources to aid in solving these problems but before one begins to solve these dilemmas the issues must first be outlined and prioritized. Needs such as food, clothing, shelter, utilities, and education come first without exception and depending on one's different current needs will determine the order of the needs being satisfied.

Renting verses buying is a dilemma that most people wrestle with. According to Freddie Mac (2009) when considering buying a home one must first find out how much one can afford.

Although there are many benefits associated with home ownership there are also many pitfalls including but not limited to major repair costs, insurance and taxes, and maintenance that are not a major factor when renting. Freddie Mac (2009) also states that one's housing payment whether renting or buying should not exceed thirty percent of before tax income. With the aid of sites such as Freddie Mac, one can make an educated decision on what he or she can afford for housing.

Utilities seem to be a necessity that is unavoidable and is also where prioritization comes into play. Heat and electricity are unavoidable costs but through conservation and education these costs can be controlled. There are websites along with ones local electric and gas companies that offer conservation tips. According to the...