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9 Financial Fitness Tips to Help Your Finances Stay Fit

31 August 2019 | 0 comments | Posted by Jackson Maven in Money Talks

Financial fitness tips

You must be aware of the importance of physical and mental fitness. But have you heard about the term ‘Financial Fitness’? Why is it important? In this article, we will discuss Financial fitness and how you can keep your finances healthy. Before going further, let us understand the meaning of the term ‘Financial Fitness’.

Definition of financial fitness

In layman language, financial fitness is the one’s ability to look after all the expenses without being worry about debts or any kind of financial crises. A fit financial individual is one who not only takes care of present-day expenses but also has savings.

This means financial fit individuals can pay their monthly expenses, Loan instalments, insurance premium, and any other unplanned expenses without undergoing any financial crises.

To become financially fit, individuals need to be focussed and have to plan their finances in detail, keeping their present, future and emergency financial needs in mind. You also need to look for credit repair, in case you have a bad credit history.

Why is financial fitness important in life?

To become financially fit, understanding financial requirements is very important. Create your financial goals and plan accordingly. The route to financial fitness is all about analyzing your expenses and tries to eliminate those who are not so important.

This way, you would be able to save some money. This money would be very helpful in critical times. Hence the only route to achieve financial fitness is by:

  • Saving money
  • Investing it properly

You might be thinking, why should you aim for achieving financial fitness? Is it that important?

Well, the answer is yes. Some of the advantages of becoming financially fit are:

  • Being a financial fit gives a feeling of security as far as money is concerned. As a result, you don’t need to panic as far as survival during critical times is concerned.
  • Financially fit individual doesn’t have to be dependent on others to fulfil their financial needs. It also reduces the intensity of any kind of financial issues
  • It also helps in creating a finance-related goal in life. You can plan your strategies in a more organized manner, and chances of success would be much higher.
  • If you are financially fit, dealing with any kind of new costs like loan EMI or premiums, would be much easier
  • Any kind of disturbance in finance management results in stress.

Hence, being financially fit eliminates stress and tension and helps in maintaining good health.

Tips to flex your financial muscles to help your finances stay fit

Becoming financially fit takes time and thorough planning. To become financially fit, you need to set some goals and need to plan your finances accordingly.

1. Transfer existing ISAs

Transfer your savings from cash ISA and transfer it you an investment ISA. Investing money in the investment ISA gives higher returns as compared to the rate of interest earned on cash ISA account when the investment is made for a longer-term. However, market-based investment does have a risk factor associated with them.

2. Have a budget and live by it

Having a budget and adhering to it would help in saving money regularly. Moreover, a budget would help you assess your income and expense. This would further help you in making intelligent choices and making wiser decisions.

3. Run a progress report

Once you have set your financial goal; keeping a regular check of your progress is also very important. It will help you determine whether your progress towards achieving your goal is on track or not. Check for progress can be done on a weekly, monthly, quarterly, half-yearly or annual basis.

4. Be patient

To become financially fit, you have to keep patience. It takes time to become financially fit. Don’t aim at achieving immediate results. Try not to take hasty decisions with your investments. In the case of market-based investments, a regular switch not only cost you additional charges, but you may also miss on some great opportunities. Investments for the year or above tend to give more fruitful results.

5. Cut back and take control

Analyze your monthly expenses and try to eliminate the unnecessary ones. This way you can save more money. Always remember “money saved is money earned”.

6. Slim down the plastic

With plastic money, we generally end up spending more than what we have expected. Try to avoid using plastic money. Spending cash would not only give you a fair idea about your total expenses but would also help you in sticking to your budget. Moreover, when you know you have limited money that you can spend, you try to use it wisely.

7. Save regularly

Try making saving an inbuilt quality. Savings help you in becoming financially fit.

8. Team up

No matter whatever your financial goals are, it would become much easier if you involve your family in it. Share your wins and failures with your friends and family.

9. Debt health check

Different types of debts affect your credit rating. There are some debts which may result have more impact on your credit report. Identify them and try to pay them on a priority basis.

Helpful tips to improve your financial management skills

  • Read books about achieving financial stability. Gather as much information as possible.
  • Perform a detailed analysis of your financial situation and try to identify problematic areas. Once identified, try to eliminate them if they fall under the category of unwanted expenses.
  • Minimum 10% of your income should be set aside for saving purpose.
  • Take your investment decisions wisely. Take risks which are worth taking.
  • Pay all your bills, debts, credit card payments, etc. on time.
  • Make financial goals and put all your efforts to achieve those goals.
  • Plan your present finances in a way that would help you in having a secured future. Plan your retirement.

The conclusion

Achieving financial fitness is very important. It will allow you to live a secure and stress-free life.

So, plan your finances in a way that you can not only enjoy your present life but can also save and plan investment in a way that allows you to live a financially independent life after retirement too.

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Recommended reading

If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on money tips.

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