Being financially fit is crucial for a well-balanced, stress-free life. Here’s why (and how):
Expand your financial knowledge
A financially fit person is constantly broadening their money knowledge. They read personal finance books and blogs, attend seminars and are aware of the evolving state of the economy. This enables them to make money decisions from a position of knowledge and power.
Stick to a budget
A financially healthy person knows that tracking monthly expenses is key to financial health. They are careful to set aside money from their monthly income for all fixed and discretionary expenses, and to stay within budget for each spending category.
A financially fit person is committed to paying down debts and seeks to live debt-free. Constant budgeting, ongoing financial education and planning ahead enables them to make it through the month, and through unexpected expenses, without spiraling into debt.
A financially healthy person prioritizes savings. This allows them to think ahead and build a comfortable nest egg or emergency fund. In turn, having a robust safety net means sleeping better at night knowing there’s money available to cover unexpected expenses.
Maintain complete awareness of the state of your finances
A financially fit person knows exactly how much money they owe, the accumulated value of their assets and the complete sum of their fixed and fluctuating expenses. This awareness takes the stress out of money management, allowing them to make better financial choices.
Maintain a healthy credit score
A financially fit person knows that an excellent credit history and score are crucial factors to long-term financial health. They are careful to pay bills on time, hold onto credit cards for a while and to keep credit utilization low. This helps them qualify for long-term loans with favorable interest rates, which saves them money for years to come.
Create concrete financial goals
A financially healthy person has long-term and short-term financial goals. This enables them to keep their focus on the big picture when making everyday money choices and empowers them to realize their financial dreams.
Achieve financial independence
A financially fit person is independent. By sticking to a budget, prioritizing savings and maintaining an awareness of their finances, they are strong, secure and completely independent.
Your Turn: Why is financial fitness so important? Share your reasons with us in the comments.