Financially Fit? Is this just a mere dream or one can really attain that summit in life where one can proudly announce that their finances are under their control? One may feel that such situations will come to our life ‘just by itself’ whereas I have come across such people too who believe that the ‘struggling with finance is the other name of life’. Well, research reveals that sadly both of these perceptions are erroneous.
‘A financial fitness is a result of a detailed plan and willing to commit to it all through one’s life’
One can definitely become financially fit and stay same throughout their life if they are capable of foreseeing the days to come and stay disciplined about their finance. Though becoming financially fit requires patience and diligence still when one practices proper financial habits, it turns into simple steps which leads a person to become financially fit forever.
Here are 10 essential and of course simple tips which one must practice day to day life to stay financially fit.
# Tip No 1: Being On a Budget
Making a budget in simple words is to make a plan for the usage of the available fund. Making a proper budget and sticking to it is the elemental force for becoming financially fit. By using a budget one can bring their financial planning into action. By making a budget one can find out where his income is going and where it should actually go.
# Tip No 2: Track Your Expenditure
The level 2 of budgeting is the tracking the expenditure. Preparing a foolproof budget will not be progressive until and unless they stick to make a checklist. Tracking expenditure makes a person examine if their finance is going on the right track. A budget should be prepared at the starting of the month and tracking expenditure should be done at the end of the month. Whenever one finds a fault in it, it must be focused and vowed not to repeat. I believe if they repeat the same for few months, being on track will become their habit and they won’t need to track it very frequently.
# Tip No 3: Start Savings
Saving is a concept which has been advised and practiced by financially concerned persons from ages. The old & famous Aesop’s proverb says ‘Save for a rainy day’ proves the same. A financially fit person must have good savings too. Having an ample cash flow every month is not the correct parameter to check the financial fitness. A person with good income and without any saving is like a flowering plant that floats in water. It definitely has a beautiful outer impression but the slightest wave of water is just enough to float it away.
# Tip No 4: Emergency Fund
This is the must have fund for every person who has a family. The uncertainty of life can show its impact on any person at any point of time. An emergency can come to a person at any form such as medical emergency, job loss, urgent travel etc. The persons who don’t have such funds become forced to use credit cards or personal loans which are not only costly but they also disturb the monthly budget for next several months.
# Tip No 5: Keep Your Family Secured
If you are a person with a family then you become responsible for the well being of the family. Either it may be aged parents, your spouse or your children. One must take health insurance for the parents, life insurance for self and spouse and special schemes for children. In the beginning, one may find it burdensome to pay all those premiums but remember that those small amount paying every year/month saves you from hefty expenditures in future. Not only that, having an insurance will make your family secured even if you are not there to take care of them.
# Tip No 6: Diversify the Source of Income
Income is the base material to build up the infrastructure which we call financial freedom. The income must be increased with the passing time. If you own a full time job then you can start a side business to earn some extra money or reduce the debts. A person with business too can diversify his income by diversifying his business by adding more products, outlets etc. A passive income is a must for the financial growth. Having a passive income has become much easier with the easy access to the internet.
# Tip No 7: Invest
Investment is the key to becoming rich. It is well known that a day job can never make you rich until and unless you start investing your extra money. Whatever one earns or saves but a remarkable return can be expected only by investing. It actually doesn’t much matters, how much one invests. If your income is low, you can invest a small amount, as the only thing that matters is whether you are investing or not. Little and regular investment can also bring a high return if you are stick to it for a long time.
# Tip No 8: Diversify Your Investment
Just as income, one must diversify his investments too. Investment always carries some risk. To minimize the risk of capital loss, one must diversify his investment. When you invest in different platforms, you can be guaranteed that all of your investment will not go in vain. After all, that is our hard earned money and we want our money to increase.
# Tip No 9: Eliminate and Avoid Debt
Debts are of two kinds – good debt and bad debt. One can say home loan, education loan etc as good debts in another hand a credit for travel, fun or shopping are considered as bad debt. Bad debts are just like the quicksand which shines from far but once you are trapped, it becomes too tough to come out of it. The one who manages their finance best always avoids such bad debts. One must focus on eliminating existing debt before setting life goals.
# Tip No 10: Stay Healthy
The above mentioned 9 tips depend largely on this tip no 10 which says to stay healthy. As we all know that a healthy mind lives in a healthy body, we must keep our body healthy in order to spend a happy and prosperous life. Taking a good care of health is a way to being not only physically healthy but financially healthy too. Maintaining a balanced lifestyle will save you from many diseases which will spoil health and finance both gradually.
The process of financial planning must start as soon as one starts earning. A financial planning is always sooner is better. When one understands the importance of financial planning and works accordingly, he will certainly attain financial freedom without much struggle.