Physical fitness is obvious. Several years ago when I was on a plane a guy walked onboard. His arms where massive and muscular. The extra large T-shirt could barely contain his bulging muscles. It took me about a quarter of a millisecond to come to the conclusion – this guy must work out – a lot. We know that there are certain criteria to being physically fit. The two most obvious factors are diet and exercise. Today I want us to look at those who are financially fit and determine what habits lead to people being or becoming financially fit.
This article is going to be the start of a series an each week we are going to discuss these habits in details.
Photo by tinou bao
There is no way around this one. If you are going to be financially fit, you have to get organized financially. I know this is a killer for many of you. Until you know how much you make, how much your bills are, and where you have debt, there is no way you are going to succeed financially. You must have a system in place to be sure receipts are tracked, budgets maintained, and bills are paid.
Those who are financially fit regularly prepare and review a written budget. Isn’t it interesting that we think we will be financially fit when we do not need to keep a budget. Think, however, about physical fitness. Will anyone stay fit if they stop exercising? No. Two of the greatest hindrances to budgeting are: (Is Budgeting a Waste of Time?) Fear. People are afraid of what their budget will reveal or afraid that budgeting will be too constrictive, and ( ) Success. When people start to do OK financially, one of the first things they stop doing is budgeting. While it is possible that how you budget will change, I suggest everyone budget on paper regardless of how financially fit they may be. Not convinced? Read
Dave Ramsey frequently says, “If you aim at nothing, you’ll hit it every time”. Being financially fit requires motivation. Goals motivate. Why do you want to be out of debt? However you answer that question is a goal. Do you want to help your children with their school expenses? Do you want to go an entire day without a creditor calling? Do you want to give more to worthy causes? Do you want to save for retirement? You (or you and your spouse, if married) need to set short-term and long-term financial goals as these will motivate you to make the necessary sacrifices necessary for financial fitness.
Achooo. If being around debt makes your stomach uneasy, you are on the right road to financial fitness. The debt allergy is a huge factor because your relationship to debt determines how much of your money you get to use towards your goals and how much of your money you give to someone else. Payments require you pay someone else. If you borrow, you invert the regular purchasing formula and you will eventually find yourself upside down in debt.
A little self-control goes a long way towards financial fitness. Those who are financially fit are not afraid to say no. They do not bemoan withholding something today in order to gain something tomorrow. A saver is not someone who is stringent or cheap, but someone who takes a set portion of every piece of pay she receives and allocates that money for the future.
Giving allows you the opportunity to care about others and to sacrifice something you want for another. That mindset and that sacrificial attitude opens the way to financial fitness. Admittedly, this one sounds a little backwards. Nevertheless, the more you give the more you will find yourself feeling financially fit – even if your bank account does not reflect that feeling.
Are you on track for financial fitness?