financial irresponsibility

Handling money responsibly isn’t an easy task for everyone. Some people just don’t have the financial education or experience others have had, or they may not even realize that they are financially irresponsible. In fact, according to the news network CNBC, over 77% of Americans feel anxious about their overall financial situation.1 This high percentage suggests that about 1 in 4 Americans are struggling with their financial responsibility.  

Several signs can point to financial irresponsibility. And if you can check off multiple of them when comparing your finances, then some things will need to change. The good news is that you can take several easy steps to become more financially responsible! 

Keep reading to learn about the different signs of financial irresponsibility and how you can turn it around. 

Bad Credit as a Sign of Financial Irresponsibility

One of the most significant signs of financial irresponsibility is a bad credit score. Your credit score comprises different factors like your payment history, credit utilization, loan or credit card defaults, etc. It’s one thing not to have any credit history or a low credit score because you haven’t taken out any loans or credit cards. It’s another if you have a handful of loans and credit card accounts and aren’t making your payments on time or at all. 

A bad credit score can be considered anything less than 670. Improving a bad score will take some time, but things like on-time payments and paying off debt can help improve your credit score and, at the same time, help you build better financial habits. 

Besides being a sign of financial irresponsibility, some consequences of bad credit are: 

  • Very high interest rates on loans
  • Difficulty finding credit approval 
  • Less loan options available 

A Constant Need To Borrow Money To Make Ends Meet Despite Making Enough To Get By 

Another sign that you may need to change your financial habits is if you constantly need to borrow money, like no credit check loans, to make ends meet, even if you make enough money to take care of your everyday expenses and bills. Whether that means borrowing from a loan option or friends or family, you’re likely spending money irresponsibly if you find yourself borrowing money constantly. 

If You Don’t Have a Budget, You Are Likely Financially Irresponsible 

A budget is a financial tool that helps with money management. Not having one can definitely be a sign of financial irresponsibility. If you don’t have a budget, consider creating one. To make a budget, all you have to do is track your income and expenses to develop a plan and limitations to how you spend your money. You can pursue several kinds of budgeting techniques; some may work better for you than others. Do your research to learn about common budgeting mistakes when managing money so that you can avoid them. 

A Non Existent or Minuscule Savings/Emergency Fund

A savings fund or emergency fund is essential for financial security. As a general rule, most financial experts recommend that people have at least three months of savings in their accounts. Suppose you don’t have that money saved up or any amount. In that case, if any emergency occurs, you will have financial difficulty and may have to turn to borrowing money to get by. 

Having any savings can prevent debt during an unexpected financial situation. On its own, not having an adequate savings account won’t necessarily mean warning signs of financial irresponsibility, as some people may not make enough to save that much right away. But if you make enough to save but choose not to, that can definitely be a sign of being irresponsible with your money. 

You can start small with a savings/emergency fund, and there are different strategies you can use to begin your savings journey. A few savings methods include the 60-day savings challenge, the $1 savings challenge, and the 100 envelope method. 

Overspending and Living Above Your Means as a Sign of Financial Irresponsibility 

Spending money that you don’t have or living above your means is a massive sign that you are financially irresponsible. What does spending money you don’t have look like exactly? Usually, this means spending money using multiple credit cards or other loan options to pay for expenses because you can’t afford to pay for those things out of pocket. Or it could look like spending money on wants vs. needs before necessities are taken care of. 

Lying About Finances

When you share finances with another person/family member and find yourself lying about how you spend your money—also known as financial infidelity—it’s a warning sign that you are financially irresponsible. Most of the time, shared finances will mean that another person will be contributing their hard-earned money into a joint account. And your spending habits and debt will impact that person’s finances. Lying about money can negatively affect your finances and your relationships. And so, it is extremely important to be transparent and honest with things like debt, income, bills, and all other spending habits when sharing finances with another person. 

Not Paying or Avoiding Bills

If you have the income to do so, avoiding or not paying bills altogether should be a significant warning sign of financial irresponsibility. Your bills can include your rent or mortgage payments, utilities, insurance payments, and more. Even if you live paycheck to paycheck, These necessities should be the priority of what you should spend money on, and if they are not, it may be time to start thinking about your money. 

If you struggle to pay bills, something as simple as automated payments can help tremendously. You can also focus on making bills the first thing you take out of your paycheck each month. 

Maxed Out Credit Cards as a Sign of Financial Irresponsibility

Most Americans have credit card debt that they are paying off. However, if you have several credit cards that are maxed out, then that can definitely be a sign that you are financially irresponsible. It can be easy to fall into a cycle of credit card debt, especially if you have bad spending habits. There are all kinds of tips and strategies available to help you manage your credit cards wisely, but what if you cannot handle doing that at the moment?

If you cannot handle revolving loans like credit cards, you may want to opt-in to secured card options, where you have to add money to use money. Or you can opt-out of using them altogether by simply keeping them in a place where they aren’t easily accessible, so you don’t have them at hand until you pay them off. Once paid off, you can even consider canceling your card accounts. Keep in mind to do this strategically, as there are a few scenarios in which cancelling credit cards may hurt your credit score.  

If you are trying to pay off a large amount of credit card debt, you can use all kinds of strategies. Some of these methods include using a balance transfer card, which provides a way to consolidate credit card debt into one interest rate and monthly payment. 

Not Having Financial Goals Set

Setting financial goals for your immediate and long-term future is a sign of being financially responsible. And so, if you don’t have any financial goals, you may be considered financially irresponsible. Below are some common financial goals (short and long-term goals) that people set for themselves:

  • Creating an emergency fund
  • Buying a house or real estate 
  • Paying off all of their debt (credit cards, student loans, a personal loan, online payday loans, title loans, or paying off a house or a car, etc.)
  • Planning for retirement 
  • Acquiring assets to build their financial portfolio
  • Having multiple investments 
  • Family planning 

If you don’t have a financial goal in mind, you can start small, for example, work on saving on a regular basis. 

Tips for Getting Your Finance Back on Track 

Mindful SpendingLimit spending, especially on impulse buys. Challenge yourself to cut back on certain expenses. 1. Reduces financial strain. – Encourages mindful spending. 1. Requires discipline and may feel restrictive. 
Active BudgetingRegularly review and adjust your budget. Try apps to track and manage your spending in real-time. – Provides a clear financial overview. 
– Helps identify and eliminate unnecessary expenses. 
– Requires time and effort to maintain. 
Debt Management Assess your debts, especially after periods of high spending. Try methods like the snowball or avalanche methods. – Provides a clear repayment strategy. 
– Reduces overall debt. 
– May require sacrifices in other areas of spending. 
Prioritize SavingsPrioritize saving. Consider automating savings to ensure consistency. – Builds financial security. 
– Reduces reliance on credit in emergencies. 
– Might limit available funds for current spending. 
Stay Positive Recognize past financial mistakes but focus on future improvements. – Positive mindset promotes better financial habits. 
– Encourages learning from mistakes. 
– Might lead to complacency if not paired with proactive financial strategies. 

Financial Irresponsibility FAQ

How can saving money regularly prevent me from becoming a financially irresponsible person?

Regularly saving money ensures that you have a safety net for unexpected expenses, reducing the need to borrow or make impulsive financial decisions. Over time, this habit promotes financial discipline and responsibility.

What are the pros and cons of having joint bank accounts, especially if one partner is financially irresponsible?

Pros: Joint accounts can simplify household expenses and promote transparency between partners.
Cons: If one partner is financially irresponsible, it can lead to overspending, potential overdrafts, and disputes over money management.

How can I identify a financially irresponsible person when considering a joint financial venture or partnership?

Look for signs such as consistent overspending, avoiding discussions about money, having a history of unpaid debts, and a lack of savings or budgeting habits.

What steps can I take to achieve financial success if I’ve been financially irresponsible in the past?

Start by setting clear financial goals, creating a realistic budget, prioritizing saving your money, and seeking financial counseling or education to improve your money management skills.

How can I protect my personal finances if I’m in a relationship with someone who is financially irresponsible?

Consider keeping separate bank accounts, setting clear financial boundaries, and having open discussions about money and spending habits. It’s also beneficial to seek financial counseling together.

Why is understanding personal finance crucial for avoiding financial irresponsibility?

Understanding personal finance equips you with the knowledge to make informed decisions about spending, saving, and investing, reducing the chances of making poor financial choices.

How does poor credit reflect financial irresponsibility, and how can it impact my future financial endeavors?

Poor credit often results from missed payments, high debt levels, or defaults, indicating financial mismanagement. It can make it challenging to secure loans, get favorable interest rates, or even pass certain employment or housing checks.

Are credit scores the only indicator of being financially responsible?

No, while credit scores are a significant indicator, other factors like savings habits, spending patterns, and overall financial knowledge also play a role in determining financial responsibility.

Is being paid cash for work a sign of financial irresponsibility?

Not necessarily. Being paid cash can be legitimate in certain professions. However, it’s essential to report cash income accurately for tax purposes and maintain records to ensure transparency and legality.

How can I improve my credit scores if I’ve been financially irresponsible in the past?

Begin by paying off outstanding debts, making timely payments, reducing credit utilization, and avoiding opening multiple new credit accounts in a short period. Over time, responsible financial behavior will positively impact your credit score.

CreditNinja’s Thoughts on Financial Irresponsibility 

CreditNinja knows that keeping your finances on track isn’t always easy. But, by taking a few small steps like planning out a budget, setting financial goals, or focusing on paying off outstanding debts, you can set yourself up for success to improve your finances! CreditNinja also suggests staying away from predatory quick cash options like payday loans while you are working on improving your finances. If you are going through a financial emergency and need immediate cash, CreditNinja suggests you consider options like: 

  • Using funds from your savings account 
  • Asking a close friend or family member for a small loan 
  • Seeking counseling or assistance from a financial advisor


  1. 77% of Americans are anxious about their financial situation—here’s how to take control | CNBC
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