What's your idea of being fit?
For some people it means never missing their early morning walk. Others might swim laps, go for a run, head to the gym or practice yoga. Fitness is very personal. You don't need to be able to lift heavy weights or run a marathon to be fit. It's about what your personal goals and desires are. Just like physical fitness, being fit financially has several elements. The good news is that just like getting into shape you can assess your financial fitness and take actions to improve it. And if you keep your goals in mind as you earn and spend your money, you can achieve a high degree of financial health over the long run. So the question is, how fit are your finances? And how can you measure it?
Let's take a look at a few elements of financial fitness.
Managing your finances
In the same way fitness is often a result of a healthy diet and exercise (calories you consume and work off), when it comes to your finances, you need a balanced budget to ensure your income and outgoings are working efficiently for maximum financial outcomes.
Saving and spending
Have you been consuming too many credit card-ohydrates? That can lead to serious weight-gain in the area of repayments. They're easy to put on, slower to take off. We've all been there. But toning your credit card debt can be done, and the exercise will make you strong. Saving, like not eating that extra chocolate slice also takes willpower. Increasing saving and reducing spending = financial fitness.
Just as the fittest bodies have a high ratio of muscle to fat and bone, a range of different kinds of investments can give you a level of financial security that will help you worry less about the future. And a mix of investments that can be flexible as your life and circumstances change is also a key for success. Growing your money through investments = financial fitness.
Life after work
There's so many things you want to do after you finish working. But you've got to be fit financially in order to do them. By focusing on building strength and endurance in your financial muscles, you'll be fit enough to do what you want in retirement. Planning for your retirement with super and other investments = financial fitness.
Have you ever noticed how many super-fit people don't even look it? Their strength and endurance only becomes apparent when they put stress on their muscles. When it comes to money, the fittest people financially often have an invisible asset working for them too. It's called insurance. They know that even if they get sick or can't work for a while, they're covered.
Being covered for unexpected financial situations = financial fitness.
Are you financially fit? If you're like most people, you could probably be a little fitter than you are now. The good news is that almost everyone can get fitter financially. Maybe it's time to consider talking to a financial planner about your financial fitness. It's so much easier if you have someone to work out with.
This information is current as at 28/05/2014.
This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.
BT Financial Group - A Division of Westpac Banking Corporation. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not constitute financial advice. It has been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation and needs. Information in this blog that has been provided by third parties has not been independently verified and BT Financial Group is not in any way responsible for such information.