What it Means to Be 'Financially Fit'Apr 02, 2022 11:04AM ● By Carol Ann Aldridge
Your first exercise should be to examine your monthly spending. This includes reviewing all sources of income and knowing what financial obligations you have. This will help you identify your “wants” versus your “needs” and allow you to create a budget to prioritize your spending. Once your necessities, such as your mortgage/rent, utilities and groceries, are deducted, you will have a realistic view of what income you have left to distribute between your debt payments and savings.
Your second exercise is to look at opportunities where you can save. Coupons, changing service providers and even removing services that you rarely use will allow you to stretch your budget even further. Once you identify your “needs”, you will have an accurate picture of your “wants”, which will allow you the opportunity to determine whether you would like to keep them or remove them from your budget. If you have one streaming service in your budget, you don’t necessarily need to remove it, unless you want to; however, if you have cable TV and a streaming service, you may want to downgrade or eliminate one.
Your third exercise is to pay down debt. Ideally, you would want to pay all bills in full and on time, but sometimes life happens. Late payments lead to additional fees and can hurt your credit score, but speaking with your lender can help; and together you can find a payment solution that works for both of you. Setting realistic payment amounts and timeframes allows you to continue to pay down your debt without dedicating the majority of your monthly income to debts and “needs”.
Your last exercise should be to treat yourself. Remember, the goal is not reducing your quality of life, but improving it! By allocating a portion of your budget for fun, you will find that it’s much easier to stay on track with your goals. Just like a diet, allowing yourself a treat occasionally will keep you motivated and feeling that you aren’t depriving yourself.
So, whether you are just beginning your financial fitness journey or already in the swing of things, know there is no right way to “exercise”. Your budget, your goals and your spending strategies should be molded to what works best for you. By making small changes in your monthly spending, you will see big results toward being “financially fit”.
Carol Ann Aldridge is a certified lending counselor for Alive Credit Union. For more information about Alive Credit Union, call 904-296-1292 or visit Alivecu.coop.