More Basics to Help You Invite Financial Fitness into your World

More Basics to Help You Invite Financial Fitness into your World

A mortgage is your largest financial liability. It can play a huge part in your success today and in the future, and even your retirement, if handled properly. I made a commitment in 2014 to bring a better understanding of financial fitness to my clients. I want to help them understand money and the power of money, and why it’s important to manage money wisely.

To accomplish this for my clients, I found a book that sums up the path to financial fitness very well. The book is Financial Fitness: 47 Principles by Chris Brady and Orrin Woodward.  I discussed the first of seven basic financial fitness principles in the last article. In this article, I’ll finish presenting basics from the book.

But first I want to expand on principle #5 from the first article. I believe it is one of the most critical financial principles in most people’s lives: budget and plan for unexpected expenses.

Unexpected Expenses Jeopardize Financial Fitness

Medical bills are the number one unexpected expense that cause financial hardship. When you find yourself with large medical bills, it is difficult to pay them back. If you don’t plan ahead for this type of hit to your financial fitness, it will negatively impact your credit scores and your ability to borrow money for a car or house or any other important financial need that arises in your life.

It’s a basic principle of financial fitness to budget, save and plan for unexpected expenses. It’s tempting not to think about it before it happens—after all, you aren’t expecting it! But planning for the unexpected can prevent the loss of your financial health.

More Basic Financial Principles for Financial Health from Woodward and Brady

The following are the final two principles from the section of the Financial Fitness book entitled The Basics of Financial Fitness. Do you see a few items in this and the previous article you could begin working on right now?

Financial Fitness Principle #6: Pay 10% of your income to tithing
Even if your funds are very low, giving 10% of your income “puts you in a mindset of abundance,” say Brady and Woodward. The act of giving puts financial worries into perspective. Even if you have very little, there are always people who have less. Giving gets you in the habit of acting as though you are financially secure.

Financial Fitness Principle #7: Using money to help others naturally increases your happiness
You might believe money will buy you happiness. However, those who know money well know that is not true. On the other hand, using money to help others does help you achieve happiness. In fact, giving often leads to greater financial strength.

Once you’ve mastered the basics of financial fitness and set a foundation for financial success, you can move on to taking offensive action to improve your finances aggressively. We’ll begin talking about your financial offense in the next article.