How to maintain financial fitness: 6 key tips and strategies for financial fitness

Becoming financial fit and also maintaining financial fitness requires some efforts and necessary actions to be taken by individuals who desire financial fitness. Most young peoples in their energetic and active period of their life thinking that the financial fitness status is something that can be delayed or postponed till another day, month or year. Some of the necessary steps to consider to become financially fit and also maintain financial fitness are:

1. Differentiate between assets and liabilities

2. Know and assess your financial goals

3. Check your financial credit report

4. Manage your taxes

5. Note and name your beneficiaries

6. Make sure your goals and investments align with each other

1. Differentiate between assets and liabilities

According to the popular financial book by Robert Kiyosaki titled “Rich Dad, Poor Dad”, the difference between assets and liabilities was clearly stated in simple terms. Assets is what brings money into your pocket while liabilities take money out of your pocket. This definition and application of these meaning to whatever we are trying to do will help in building our financial fitness better than we think. The assets you build or acquire and the liabilities you have will go a long way in determining your net worth. Assets are of different types and might include things such as savings, cash at hand, stocks, bonds, real estate, intellectual properties while examples of liabilities include loans, credit card, mortgages and so on. A simple way of calculating your net worth and financial fitness is by adding up all assets and making subtracting all liabilities incurred.

2. Know and assess your financial goals

Assessing your financial goals and objectives is one of the ways of building and maintain financial fitness. You should always have thought about your financial goals daily, weekly, monthly and yearly.  Your financial goals may be divided into long term goals and short-term financial goals. your long-term financial goals may not change overtime and may cover travelling or going on vacation during retirement while the short-term goals might cover paying bills and the medium-term goals might include saving for a house. These goals might be assessed and re-evaluated every month, six month or on yearly basis.

3. Check your financial credit report

A good way of maintain financial fitness is by checking your financial credit report on a scheduled basis. This financial credit report will cover and contain information about the current status of your bank or credit accounts and the paying history of your bills. Having a good credit financial report will avail you the opportunity of obtaining financial loans at a good rate. Your credit report needs to be check by you at least once in a year to ensure the appropriateness of the report in term of correctness and timeliness. An extra will be required and recommended if you are willing to go for items such as cars or house purchase.  

4. Manage your taxes

Your tax bill needs to be paid regularly therefore you need to make sure you have set aside some money to pay your tax bills before the deadline which can be annual. The amount of tax owned by individual depends on the tax bracket. Some employers withhold taxes from paycheck but this might not be the original amount or taxed owed in some cases.  A self-employed person might be paying his or her tax separately and most times on quarterly basis.

5. Note and name your beneficiaries

When opening a financial or insurance account, you will be asked to name your beneficiaries in case of any event which may not be predictable. Your beneficiary is entitled to take over and manage your accounts in case of unpredictable event (death). It’s very important to note and name your beneficiaries putting into consideration some critical factors. The type of family that you have may determine your choice of beneficiaries. Although your legal married wife is your default beneficiary, many individuals most times designate their children or close family member as their beneficiary weighing all necessary factors.

6. Make sure your goals and investments align with each other

It is important for maintaining a good financial fitness that you check and make sure your financial investments and goals are working in alignment as difference in investments and goals will affect your financial fitness and most times your net worth. Examples of investment is mutual fund that can hold up many kinds of financial investment. Secure your financial investments with insurance to avoid, reduce or mitigate risk.

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1 Comments

  1. Such wonderful suggestions for financial success. Thank you for sharing. ☺️

    Pastor Natalie (ExamineThisMoment)
    Letstakeamoment.com

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