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.
