Basic Concepts to Begin Achieving Financial Fitness

Basic Concepts to Begin Achieving Financial Fitness

I wanted to find a way to make the principles of financial health more obvious and more easily understood for my clients, so I began looking for a resource. I found it in a book called Financial Fitness: 47 Principles by Chris Brady and Orrin Woodward.  I’m sharing the most important of those financial principles in a series of videos that accompany this and upcoming blogs. 

Financial Fitness Begins with the Basics

This is the first of the six financial fitness blogs, with principles from a section of the book called The Basics of Financial Fitness. These are principles that help you build good foundational habits and get your mindset in the right place to support your desire for financial success. We’ll cover the first half of the basics in this article, and finish up our discussion in the next article.

Financial Fitness Principle #1: It’s not what you make but what you keep

Focusing first on savings is one of the most important steps you can take to achieve financial success. You’ve probably heard people say “Pay yourself first.” That means building a habit of saving starting now. Over time, your savings will become one of your most important assets.

Financial Fitness Principle #2: Money is a gift with a specific use

The authors of Financial Fitness point out that any time you acquire money, it comes with a responsibility to be a good steward of this gift. You should use the money you have—no matter how little or how much—for something that matters to you, your family and others.

Financial Fitness Principle #3: Live within your means

For this principle to work, you must always live within a budget that fits your income…always. No exceptions. It might seem obvious, but this means being able to say no to yourself, your colleagues, your family and friends when something you or they want you to spend money on does not fit your financial situation and financial plan.

Financial Fitness Principle #4: Stop getting financial advice from broke people.

It stands to reason that people who don’t have money won’t have useful advice for you when it comes to managing your money. Get advice from people whose financial habits you want to learn from. Listen carefully to what they have to say and follow their advice faithfully.

Financial Fitness Principle #5: Consistently budget and save for unexpected expenses

Many unexpected, devastating life events can put a huge dent in your financial fitness if you aren’t ready for them. Medical expenses are probably the number one culprit (more about that in the next blog). The only way to fight the lasting negative impact of these events is to consistently save for it.

These principles of financial fitness are relatively simple—a great place to start making changes in your own financial foundation. Take small steps now to begin mastering these concepts and working toward improvement of your financial situation. We’ll cover more basics in the next article.