It refers to an agreement whereby one party would pay another party, such as a lender or a service provider. There will be binding terms to be adhered to dependin on the particular situation. In fact obligations may be either fixed or variable. Financial obligations need to be taken seriously as there could be legal ramifications associated with not sticking to one's end of the deal/agreement.

Financial responsibility is the obligation between different parties under a contract once the relationship of the financial plan ends: the transfer or exchange of financial assets or funds with other institutions at extremely unfavorable terms.

The financial obligation is a debt that a person incurs when they borrow money. They are obligated to pay the lender back with interest in a specified amount of time, usually called a term. There are many types of debt instruments that can be used to measure the total value owed by a borrower. The most commonly used measures are gross domestic product (GDP) and gross national product (GNP)

Financial obligations are different from other debts because they are incurred by people to provide basic living necessities, such as food, heat, shelter, or clothing to themselves or their families. Financial obligations also include things like car payments and rent. Individuals incur financial obligation through loans, either credit cards or other loans which can be challenging to repay.