The Importance of Financial Integrity
If you have set aside a $100 budget for a product or item you have been wanting to get for so long, only to see that it gained an increment of half the amount of your budget, what will you do? Will you settle for something less expensive or the desire to have it is so great that you will snip off the amount from your utility bills budget allocation?
Hearing it the first time, the term financial integrity seems a strange word. You don’t get to hear it everyday nor hear it as often unless you are in a credit and collection department of a bank or loans and mortgage agency.
Basically, when one mentions about financial problems or financial allocations, you know that the person is talking about matters pertaining to money and expenses. On the other hand, when an individual would be asked to describe integrity, he may mention values like honesty, accurate and up-to-date documentation as well as prompt response to financial inquiries.
Therefore, together, financial integrity is manifested by an individual on how he handles his income against his expenses. Financial integrity is one human characteristic that can be measured by having individuals answer situational questions. The interpretation of results may vary depending on the format of questions used. Here’s one:
Unfortunately, having consumed all the remaining days of your paid sick leave two months ago, you got sick for about 3 days. When you got back at the office, you saw your colleague flashing her new red suede pumps. You saw how much that costs and you know it would look better on you. On your way home, you saw the same suede pumps, this time adorn with some glittery material, making the wearer feel glamorous. And so you will (1) buy it, (2) forget about it or (3) not now.
The question above measures one aspect of an individual’s financial integrity. A person’s capacity to decide against what he wants that but he doesn’t need can be considered as a prerequisite to obtaining financial honesty. The more firm one can deny himself of his unnecessary wants, the more stable his financial integrity is. Inversely, the more frequent an institution follows up an individual for his payment before he makes one, basically says almost everything about his system in keeping up with his financial obligations.
Philosophically speaking, an individual who has this trait are commonly described as honorable, never been known to break their promises and derives self-respect in fulfilling both financial and personal obligations.
Financial integrity is an important factor in many fiscal-related matters such as loans and credit cards. Before a person gets the approval for a specific loan or credit, companies involved in such dealings do credit standing investigation. How? Lending companies and banks require a couple of documents to prove they are responsible individuals, such as bank statements, certificate of good credit standing, as well as updated and paid statement of accounts from institutions that an individual receives services from. In some instances, a person’s colleagues, neighbors and friends are randomly selected from which the company obtains information to establish a person’s capacity to pay and maintain a good credit standing.
If one is capable to provide such documents, then one can assume that this person possess financial integrity – that he is an honorable person and has the ability to balance his income in relation to his expenses, thus a fine individual to grant specified loans and credit approval.