4 Practical Tips to Stay Financially Fit

Financial fitness is more important than ever. Year after year, getting healthy is a top New Year’s resolution for Americans, while saving more and spending less typically ranks lower on the list of priorities.

While many people will purchase gym memberships they may never use, taking steps to improve financial wellness is a resolution worth pursuing, and sticking to. 

Saving more and spending less is a good place to start when trying to improve your financial situation; however, many people require additional help to reach their goals.

CFP Board Ambassadors – CFP® professionals who help to support CFP Board’s consumer advocacy and mission to benefit the public – offer the following tips to help you become and stay financially fit.

Why Financial Fitness is Important?

Financial fitness is just as essential as physical or mental health. It gives you the stability and freedom to live life on your terms. When you manage your money wisely, you reduce stress, avoid debt, and feel more in control of your future. 

Whether it’s budgeting, saving, or investing, developing healthy financial habits empowers you to handle emergencies, plan for big goals, and build long-term security. Simply put: financial wellness supports overall well-being.

Benefits of Financial Fitness:

• Reduces money-related stress and anxiety

• Helps you avoid or eliminate debt

• Supports long-term goals like buying a home or retiring comfortably

• Prepares you for emergencies with savings and financial cushions

• Encourages smarter spending and saving habits

• Boosts confidence and independence in everyday decision-making
  

4 Tips to Remain Financially Fit

Here are four great tips to maintain good financial health. 

1. Create a budget

Creating a budget is a simple way to determine how best to spend your money. Start by reconciling last year’s expenditures and creating a list of necessary payments. Giving yourself a “cheap month,” such as spending $100 a week, can help define your needs. In addition, working with your spouse or partner can help identify a realistic budget and prevent overspending.

2. Put yourself first

Spending too much on adult children, parents and other family members can jeopardize your long-term financial situation. Having children live within a budget will force more careful spending while teaching a valuable lesson. For adult dependents, spend carefully; you can’t take care of others if you haven’t taken care of yourself.

3. Maximize benefits

Take full advantage of your existing benefits package, such as your 401(k) or retirement plan. For a 401(k), make sure to maximize your investment by matching your employer’s contribution. If you operate within individual funds, rebalance your 401(k) account periodically. Establishing a dollar cost averaging arrangement – investing set amounts at regular intervals regardless of the financial climate – for a new account, such as a Roth IRA or 529 plans, can also increase your savings.

4. Know yourself

Many people have chronic issues of overspending or mismanaging debt. Developing smart habits can improve your finances. If you fail to prudently spend with credit cards, cut them up. If you struggle to meet basic payments, round up to the nearest whole number on larger expenses. For example, if your car payment is $375, plan on spending $400 per month.

Wrapping Up

Big or small, everyone can take steps to improve their financial well-being. This year – while you’re working on your physical fitness – get you finances in shape by scheduling a meeting with a CERTIFIED FINANCIAL PLANNER™ professional who can help you take action to improve your financial situation.