Physical fitness. We all know that being fit is the better option for our well being. Even though, sometimes we prefer to snack on ice cream over a bowl of broccoli or sit and watch Netflix all day rather than going outside for a brisk walk.
We tend to choose the unhealthier option despite our subconscious mind telling us to select the better one.
With all that said, I think it is safe to say that the same scenario can be applied to our finances and how we handle them. We have to be the ones to choose the better of two options. If we don’t, we must pay the consequences.
And trust me, it takes a great deal of mental work to maintain your finances—keeping up with payments, not spending too much money, monitoring budgets, etc.
If you have been following my blog, you’ll know I am a sucker for budgeting and frugal living. I am also a believer in living life while upholding the way that I do handle my money. Meaning, although I choose to live this way, I don’t lock myself in the house all weekend and sulk over not being able to travel freely and spend frivolously.
I still manage to go out and have fun. Even if I have to track down the nearest free/low-cost events around my community.
It works for me and my family.
So now that we have established that managing finances is, in a sense, similar to managing your physical well-being, let’s address the 5 simple steps you need to take in order to reprogram your entire financial fitness regimen.
1. Figure Out Where You Went Wrong
Similar to starting a physical fitness regimen, you need to figure out where you went wrong.
Did you begin unhealthy shopping habits? Did you quit paying attention to credit card interest rates? Dig deep. Find the failing point that has caused you to steer clear of the financial fitness bandwagon and focus on getting back on track.
In my case, prior to launching our debt free journey, I truly believed that living in debt was normal. So I paid no mind to my debt and spent money as pay day rolled around. It was not until I became engaged that I realized my idea of money management was totally unimpressive and the complete opposite of my now husband’s.
And by the opposite, I mean worse.
Once you find out and acknowledge where you went wrong in terms of managing your finances, definitely consider setting up your Emergency Fund.
2. Where Is Your Emergency Fund?
The good ol’ emergency fund (EF). Dave Ramsey says to set is at $1,000 while applying the rest to debt. If that works for you, go for it.
For my family’s situation, we choose to keep a much larger EF in our account. It keeps me sane when I lay my head on my pillow at night.
I know to some my approach doesn’t make sense at all (as we could pay off a lot of our remaining debt with our EF), but we just prefer to have that large nest egg in our account in case of a huge emergency.
[[Baby #2 is on the way, so we are currently on pause mode until the baby is born anyway.]]
Once you have decided how much money you want in your EF (I suggest a minimum of $1,000 as Dave suggests), it is time to establish a budget.
3. Your Budget is Your Friend
Don’t roll your eyes. Budgeting is a life changer and a very important key factor in maintaining a healthy financial lifestyle.
Similar to meal prepping and monitoring your water intake, keeping a budget and following it as closely as you possibly can will improve your finances tremendously.
If you currently thrive on paying minimum payments towards your student loan debt and cannot find spare dollars to apply each month, you need a budget.
If you want to refinance your student loans, I highly recommend using LendEDU as a starting point. LendEDU is designed to match borrowers (that would be you) with the top lending companies, all in one place. Sort of like a one-stop shop to finding the best rates!
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If you do not have the will power to bypass racking up your credit card so that you can travel (only to pay the minimum balance each month), you definitely need a budget.
By creating a budget, you allow yourself to spend only what you can afford each month while eliminating your debt all at the same time.
Although you won’t see your debt dissipate overnight, once you get the hang of budgeting, you’ll quickly pick up the pace and figure out ways to demolish your debt in no time.
4. Spend Less Than You Bring In
Figuring out how to spend less than you bring in each month takes some serious number crunching. I believe that if you are able to accomplish this, you are well on your way to crushing your debt.
Spending money for self-satisfaction or for fun will never take you far, in fact, it will only drag you into a deeper financial burden.
So…here’s what to do:.
Pull out your budget, I trust you have already tallied up (or will soon plan to tally up) your debts, variable expenses, fixed expenses and income. Find areas of your budget that you can cut back on…movie outings, dining out, clothing budget, etc.
All of these are areas which do not benefit your well-being. So cut what you can and apply that money toward your debt.
5. Check In, and Check In Often
I’ll keep this one short. But the headline pretty much sums it up for you.
You must keep on top of any goal that you place for yourself. Whether it be a physical or a financial goal. If you have absolutely no drive to succeed, you’ll never be able to accomplish them.
So what should you do? Check in often!
Take a moment each week to check in on how you are doing. Once you’ve established a good habit in terms of handling your finances, check in every month.
The more you check in, the more ammo you’ll have in accomplishing your goals.
As I wrap this post up, I hope you realize that being financially fit is extremely important!
If you follow these 5 simple steps you will ultimately transform your finances and begin to live life like no one else. A life full of cash flowed trips, cars, and plenty of giving!
This is the motto that I live by.
So what do you say? Are you going to jump on this financial fitness bandwagon and start getting your finances in order?!
I think you should 😉
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