Working on your financial health takes practice, patience and perseverance. Just like with physical fitness, financial fitness is something that takes time and effort, but the rewards are well worth the hard work. Here are our top tips to help you work toward better financial fitness.
1. Be realistic & get specific
First and foremost, be realistic about the current state of your finances. Take the time to find out:
- How much you make each month.
- How much you’re spending each month.
- How much debt you’re in.
- How much you have in savings.
Be honest. You can’t improve your financial health if you aren’t honest with yourself about where you’re at. And, who knows, you may be doing better than you think.
Then, be specific about what you want to achieve with your finances. Are you looking to buy a home? Build your credit? Build a retirement plan? You can determine what you want to achieve by asking yourself the following questions:
- Where do I want to be in five years? 10 years? 20 years?
- What do I wish I would have done five years ago? 10 years ago?
- What are the financial areas that I can improve in? What areas do I excel in?
Once you’ve gotten specific about your financial goals, take it a step further and map out what you need to do to reach that goal.
For example, it’s not enough to just say that you want to buy a home. You need to get specific about the steps you’ll take to get there. Think about the current roadblocks preventing you from buying that house. If you don’t have any savings for a down payment, build up your savings by putting a specific amount of your income each month into a savings account.
2. Educate yourself
Let’s be honest – learning to be successful with your finances can be really tough. There isn’t a one-size-fits-all roadmap and we often have to learn lessons the hard way. But in today’s world, there are so many educational resources to help you master the financial topics you don’t quite understand.
Here are ways to learn more about financial topics:
- There are some free online courses that you can take to learn more about personal finance.
- Go to your favorite place to buy books and browse through their “Money” section. Or, if you don’t have time to browse, you can check out Amazon’s Personal Finance Best Sellers or The New York Times Business Best Sellers.
- A lot of news and media outlets have a section for finance. You can take a look at the articles and resources available at whichever news outlet you prefer. If you’re not sure where to start, here’s a list of top financial news sites.
- There are a lot of financial thought leaders that provide personal finance articles, tips and tools. Popular sites include Credit Karma, NerdWallet, Bankrate, among others. You can view a list of other sites here.
- Check to see if your bank or credit card issuer offers free financial education resources for you.
3. Take advantage of technology
There are so many apps and websites available that can help you reach financial goals. Whether you’re looking for an app to help you budget or a website to help you save money while online shopping, the options are endless. There’s simply no reason why you need to tackle all your financial goals without a little help from technology.
- If you’re looking for a budgeting app, take a look a Nerdwallet’s recommendations.
- If you’re wanting to save money while online shopping, review these rebate sites.
- If you want to save more money, check out Credit Karma’s best money-saving apps.
- If you don’t know where to begin, consider these personal finance apps.
4. Reduce, reuse and reimagine
You can often turn your finances around simply by taking a look at the items you’re currently using and buying every day.
Reduce: Take a look at where you’re spending your money. Then, try to think of ways that you might reduce your spending. For example, you might take a look at your latest purchases and realize that you’re paying for 5 different tv streaming subscriptions. Consider removing the streaming service you haven’t been using as often, or see if you can find a deal on the subscription for a cheaper price.
Reuse: Items that have a one-time use can be pricey over time, like plastic water bottles, paper towels, sandwich bags, etc. Think about the items you’re only using once and then throwing away. Is there an alternative that you can use again and again? Chances are that you will end up saving money over time if you switch from paper towels to washable cloths.
Reimagine: Financial health can sometimes take some creativity. You can take out your DIY skills and turn something you already own into something you need. This could be as simple as washing out your pickle jar when you’ve eaten them all and using it to store loose change. Or, it could be as fun as turning your old t-shirt into a new toy for your dog.
5. Beef up your savings
When you make saving money a priority, you’re really making your financial health a priority. This is because a healthy savings account can give you the peace of mind that if an emergency happens – like a flat tire or a broken appliance – you can take care of it. So if you’re serious about taking charge of your finances, start to increase your savings account in any way possible. Here are some ideas to get you started:
- Automatically deposit a portion of your paycheck into your savings account
- Set a goal for your savings account and track yourself as you make progress
- Set a budget and stick to it
- Consider a savings account with a higher interest rate
- Decrease your spending on non-essential items
6. Invest in yourself
One great way to introduce new income or increase your existing income is to invest in yourself by learning new skills, increasing your education or taking advantage of the knowledge you already have. Be proud of the skills you have now (or the skills you could gain for the future) that can help you have a little more cash in your pocket.
Here are some ways you may be able to invest in yourself:
- Continue Your Education – This can sometimes be a daunting (and pricey) goal, but when you invest in your education, you’re investing in your future career and income.
- Create a Side Hustle – If there’s something you already love as a hobby, consider turning it into a business. Or, consider the options listed out here.
- Increase Your Current Skillset – If you’re already in a career you love, think of skills you can gain to take it to the next level. Look for online courses or workshops that can help you gain leadership skills, increase your industry knowledge or stay on top of the latest advances in your line of work.
Financial fitness can take some time and effort. But just like physical fitness, the effort can be well worth your time and pay off in the long term.