Financial Fitness – How to Achieve It?
Physical Fitness is a state of health and well-being, an ability to carry out your daily tasks without fatigue. It is proven that being physically fit ensures that you have a strong resistance to illnesses, brim with energy and radiance, recover faster from incidental injuries, and less prone to stress and anxieties. But have you worked towards Financial Fitness?
But there are other aspects of human existence such as mental and emotional well-being that are often ignored. Money issues are known to be the NUMBER ONE causes for broken relationships, divorces, and family legal battles.
No wonder these financial issues affect our minds, in turn, our emotions, which in turn affect us physically. The underlying cause of the monetary issues of life or financial instability is because of a lack of awareness of Financial Fitness!
What does being financially fit mean? How can money keep us physically and mentally fit?
Well, Physical Fitness and Financial Fitness have a lot in common. Financial Fitness is a state of wealth and well-being, knowing where you stand financially, what goals are within your reach, and what you can reach out for. It makes you aware of the attainability of your dreams, understands the money inflow and outflow, and teaches you to respect and use money as a way to lead a fulfilled life and not view it as a tool for greediness.
The benefits of being financially fit to include peaceful retirement, a defined path to achieve your goals and your dreams, protection for yourself and your family from adverse circumstances, and developing strong roots to weather any financial storms like job loss or reduced income.
Much like physical fitness, financial fitness cannot be achieved in a day. Just as you would track your calorie intake, calories burnt, kilograms lost, inches lost, etc., financial fitness would need you to track your income, your expenses, your investments, your loans, and liabilities, etc.
How to achieve financial fitness?
In physical fitness, it is important to create a Calorie Deficit, a negative value between the calories consumed and burnt and in financial fitness, it is the Income Surplus, a positive value between the income earned and spent that has to be achieved.
To be financially fit, track all your sources of income just like you would count your calorie intake. Consider your salary, bonus, interest income, rental income, investment income, just any other income which gets into your account.
Similarly, track all your expenses just like you count the calories burnt. Consider your utility bills, insurance payments, groceries, education costs, Fuel bills, just any type of expense you pay from your pocket.
Check your expenses list and categorize it into needs and wants. Reduce spending on your wants. A slimmer expense list will leave you with a bigger chunk to invest and achieve your financial goals.
Starting a financial diet takes great mental effort. The tendency is to tighten your purse strings for a few weeks and then splurge without control. It is important to achieve a fine balance between splurging and tightening your purse strings too strong. That new Smartphone costing Rs.60, 000 can wait if your current one, is not more than a year old.
Devise a plan to bring your finances back under control. Remove non-performing assets, review your goals, make a budget, and stick to it, decrease your liabilities, diversify your asset classes, and stay motivated.
Take Help from an Expert
Consult an expert financial advisor or a financial planner. Discuss your concerns and know the areas you need to work on. Get a proper fitness map prepared and follow it.
Things to keep in mind before you start on financial fitness journey
- Don’t expect immediate results. The results of both financial and physical fitness will take time to be visible.
- Maintain discipline to achieve your goal. Financial fitness is achieved by regular, disciplined investing and not by investing in a windfall and splurging regularly.
- Identify investments to suit your needs, your risk profile, and your goals.
- Keep a schedule of your debt payments, investments, and insurance premiums. Always stick to a schedule for investing – save first and spend later.