Did you know that financial fitness is a lot like physical fitness? Here’s how:
Keep your eye on the ball
Financial fitness requires your constant, active, personal management.
Your situation can improve, starting today
It’s never too late! It does not matter where you’re starting from.
Follow basic principles to create success.
Create your financial fitness day by day. Read on to see what you can do!
Have a clear and honest picture of your financial state.
How have you managed money so far? Have you managed it or have you allowed it to manage you? Where does your money go every month? Don’t make general answers to these questions, but take some time to look up and find out the details of your financial life.
Make realistic goals for both your present and your future.
Revisit these goals periodically and make sure you are on track to meet them.
Live on less than you make.
You don’t have to spend everything that you bring home. Beware of making ‘lifestyle upgrades’ before you can truly afford them.
Make a plan to manage your debt and borrow wisely.
Borrowing more than 25% of your take home pay can lead to higher levels of stress and a greater loss of your money over time due to the interest accrued.
Save for unexpected emergencies.
Emergencies happen, so it is best that we plan in advance for them. A good amount to save is between 3 – 6 months’ worth of expenses, however, save as much as you feel comfortable with.
Plan for your (and your family’s) future.
In addition to having an emergency fund, shop around for the right amount of insurance for your needs. You may also want to make savings goals for other life events like: college, weddings, funerals, down payments on a home, saving for a care, etc.
Plan your spending.
Avoid impulse or emotional purchasing decisions – especially on higher priced items. Make sure that you spend in ways that you truly enjoy – be happy about how you are putting your money to work.
Don’t financially get involved with anything that you don’t understand thoroughly. Ask professionals in the field or a trusted adviser for help.
Know your fiscal limits and don’t let outside influences persuade you to stretch beyond a point that makes you comfortable.
Make an impact and practice gratitude.
After you have your personal finances and your family taken care of, set aside some resources to invest in making an impact in the community around you.