Constructing Your Financial Profile – Your Responsibilities

So far we have discussed Your Stage of Life, Your Life-Style and Your Tolerance for Risk, the first three of five steps in building your financial profile. Your Responsibilities is the fourth step in this process.

If you’re like most people, you have responsibilities- children, perhaps, who look to you for support, or elderly parents who require financial help.

But everyone defines responsibilities differently. For example, do you consider it your responsibility to supplement your parents’ retirement income? Do you think you owe it to your children to help them buy their first car?

When it comes time to develop your financial profile you must take your responsibilities – as you defined them – into account. They influence how you spend, save and invest.

Here’s an example. Let’s say you are married, the father of two teenagers and in your view, it is your responsibility to foot the entire bill for your children’s education. Lets assume that a friend a friend approaches your to invest in his small business. The contribution required of you is Hc50,000 ($50,000).

You refuse to enter into the business, because you can’t afford to invest in anything that’s less than 100% secure. Why? You want to use the GHc50,000 ($50,000) for your children’s University education. And if you lose any part of that money, you’re in trouble.

To assess how best to meet your responsibilities, you must examine your financial resources – both present and future.
I suggest you also read the preceding articles that set the tone for this article:

Building a Firm Foundation
Constructing Your Financial Profile - Your Stage of Life
Constructing Your Financial Profile – Your Life-Style
Constructing Your Financial Profile – Your Tolerance for Risk

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