We all know what physical fitness means and what physical fitness looks like. But most of us don’t know what financial fitness means or looks like.

 

Financial fitness means:

•             Having control over day-to-day, month-to-month expenses

•             Having the capacity to absorb a financial shock

•             Being on track to meet financial goals, and

•             Having the financial freedom to make choices that allow you to enjoy life.

Physical fitness and financial fitness have a similar formula for success:

•             Physical fitness… eat less and exercise more

•             Financial fitness… spend less and make more.

Sounds really simple. But if it were so simple, we’d have heaps of skinny millionaires running around!

 

Getting financially fit takes a few key things:

 

1.            SPENDING PLAN

Just like everyone hates diets, everyone hates budgets. That’s why a spending plan works… no need to track every cent, simply set aside amounts for different things – savings, bills, and fun. A spending plan puts spending boundaries in place and just like in every other aspect of life, when you know where the boundaries are, you have freedom to enjoy the space within them.

 

2.            FRUGALITY

Most people hear the word frugal and think cheap. No, no, no… frugal is not cheap, frugal is smart. It’s about making money choices that maximise your spending on the things you enjoy and minimise the spending on things you get little or no value from. Being frugal is about plugging money leaks so you then have that money for things you really want to do in life. Every time you spend money you’re making a choice, so by saying no to some things you are choosing to say yes to others. There is only so much money to go around and when you are financially fit your money is prioritised towards your happiness.

 

3.            ACTION

I can show you what to do, but I can’t make you do it and I can’t do it all for you. Just like with physical fitness, only you can make things happen. Just like if you want to get physically fit, getting financially fit won’t happen without action. If you take action, if you follow my advice, you will get results! I’ll hold you accountable. You can have the best information in the world, but unless you put it into action that information is worthless.

Save for tomorrow, or live for today? When you’re financially fit, there's no reason you can't do both.

 

You’ll get trim and fit by eating less (or better) and exercising more. Getting financially fit is the same. To get financially fit we need to save more, not borrow too much and invest some money. Yet most Australians live pay cheque to pay cheque. More and more Australians are retiring poor.

 

Getting physically fit and financially fit are both simple, but neither is easy.

 

THE BIG ‘IF’

There is a program you can follow to achieve financial freedom. If you follow the program throughout your working career, you will almost certainly end up being wealthy. 

 

It’s a big ‘if’ though! It’s a very, very big ‘if’. Most people never get started, let alone stick with the program.

 

If your financial fitness needs a little (or a lot of) work and you see value in working with an expert to help you develop a financial fitness plan to improve the chance of achieving your goals, then let’s chat.

 

Cheers,

 

Daniel

 

If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.

 

Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.