A woman who is financially fit.

Becoming Financially Fit

How do your finances look? Do they need a little help? Well, money inst everything but is sure does help. Take a minute or two and find out how you can get yourself on the path to financial fitness. Four little steps that will get you on your way. Let’s get to it.

Like I said, money is not everything but if everything else was equal, it is better to have it than not have it. There are things that people who have money do that keep them financially fit. Let’s take a look at what they do and you should be doing.

1. Get Rid Of Debt

This is critical. If you are carrying debt, you are making someone else money. All that credit card interest you are paying is money that could be in your bank account. Instead of being in your account, you are lining someone else’s pockets. Let’s put an end to that and get started right now.

First, you need to list out every debt that you have. Include the amount that you owe and the interest that you are paying on it. If you are like most Americans, it will be quite a list and might seem a little intimidating. Don’t panic, you can change things. That old expression, “the longest journey begins with one step” has never been more true. You just need to put that foot forward.

Once you have a list, you need to determine the method that you want to use to pay it off. This will depend on whether you are more emotional or logical.

If emotions rule you, you should start with the lowest balance account, regardless of the interest rate. Pay the minimum on all of your other accounts and pay as much as you can on this one. This will allow you to pay off a single account very quickly. When you get that account paid off, even if it was only 200 dollars, it will be very motivating. Seeing that zero balance is a wonderful thing and that will spur you on to pay off more debt.

Once you get that first account paid off, pick the next lowest and keep on going.

If you are the logical type, you should pick the account with the highest interest rate. Pay the minimum on all other accounts but pay the maximum on that one. Paying as much as you can on the highest interest account will be the fastest way to pay off your debt but it might not be the most motivating. If the highest interest account is of a high balance, it is less encouraging to see it drop slowly. Still, this is the most efficient way to pay your debt.

Getting rid of debt is a slow but crucial process. Just keep at it, stop charging to your accounts and you will get there.

2. Live Within Your Means

This is a problem that far too many people have. They fail to live within their means because they fail to calculate what their means are properly.

You might be able to afford all of your bills comfortably but if your budget does not include savings, you are calculating it wrong. You might be living on 4000 dollars when you really should be living on 3000 dollars. Saving is crucial to building wealth and security and you should treat it just like every other bill, it is a mandatory monthly payment.

To calculate your true “means” take your monthly take home or net pay and subtract 20 percent. This is how much you need to put into long term savings and investments each month. This might sound like a lot, but this is really what it takes to build wealth.

Now, take the rest of your money and divide it out into your monthly bills. Choose housing, transportation, food budgets and entertainment budgets that fit into your new total budget. This may take some adjustments but that is where you need to get.

3. Make More Money

Everyone wants to make more money but very few do anything about it. People tend to become complacent and a bit lazy. If you need more money for your savings, increasing your income is a great way to get there.

There are several ways to maximize your income. One is to take on additional work. If you only work 40 hours a week, for example, you probably have the time to take on an extra job. This can be as simple as working a few hours driving for Uber or it could mean an overnight shift at the local Walmart. Every extra dollar you make is crucial to your financial future.

Another way to maximize that income is to boost the pay at your current job. This might mean educating yourself to improve your worth to your employer or it could mean moving on to a higher paying job.

If you want a big raise, you will never get one at your current job. Employers just do not reward their employees with big raises anymore. They save that money to attract new talent and that is how you will get your pay increase. If your pay has stagnated, polish up that resume and move on.

4. Become Thrifty

You might call it cheap but it means the same thing. Being cheap is not a bad thing, it will keep you from making impulse buys and keep you looking for the best deals.

Being thrifty is a state of mind that you need to get into. Once you do, it will stick with you and keep you on the right track.

Why buy a new car when yours is running great? Who needs cable when you can use a streaming service for a fraction of the cost? Soda is expensive at restaurants, why not get  free water? There are a lot of ways to be cheap or thrifty and they really will not affect the quality of your life much.

Wrapping Up

It really does not take that much to get on the right financial track, but you have to be disciplined and willing to go your own way. Stop doing what others do and start doing what is right for you financially. Remember, those people flaunting that money are probably deep in debt.

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James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.