Becoming financially fit, just like achieving a higher physical fitness level isn’t easy. It takes hard work, dedication, and granite-like discipline to make significant positive changes.
The fact is – you need to put in the work. Period.
But when you’ve got a ton of motivation and energy, but don’t know what to do with it, not only are you wasting your time… But you’re missing out on the potential for growing your personal wealth and boosting your net worth, too. And friends, that’s no good.
That’s why, I’ve got Robbie here today to help get us on the right path.
Take it away, Robbie!
3 Actionable Tips to Make you Financially Fit
Hi everyone! I’m Robbie and I’m a personal finance blogger over at EAT Money and am really excited Mike has given me the opportunity to share some thoughts with you today.
If you don’t know me or my blog I am a 30-year-old engineer from the midwest that focuses on Earning more, Automating my finances, and Tracking my expenses to build up a money monster that, while small now, will continue to earn me more and more money over time.
Take the E, A, & T from Earn, Automate, and Track and you can see the rumors are true about engineers and our lack of creativity!
Financial Fitness
One of the things that both Mike and I are passionate about is physical fitness. I don’t write about it much but have followed Mike as he has made progress from never missing a Monday to even doing pushups in the hospital. While I’m speaking for Mike I think we’d both agree that an important part of staying in shape is developing good habits.
During my financial journey, I’ve learned habits can not only make you physically fit but financially fit as well. Financial fitness is one of those topics that everyone from the millionaires to those of us just starting out finds important.
In this post, I’d like to layout three actionable habits that anyone can begin to either start or accelerate the growth of their net worth and increase their financial fitness. One of the basic barometers of financial fitness would be your net worth. If you don’t know how to calculate your net worth, I think this would be a great starting point!
Earning
Ugh! Earning more. If only it were that easy. Don’t we all wish we could flip a switch and watch the money roll in? Unfortunately its not like that which means we need to work hard and stay patient.
When a lot of people want to earn more the first thing they turn to is a side hustle. While a side hustle is certainly a great way to earn some money outside the 9-5, one question I’d ask those side hustlers is if they’ve maximized their opportunities to grow their income at their day job.
I’d imagine that some can say they have but a healthy percentage would say this isn’t something they’ve evaluated. If you haven’t, I’d encourage you to reevaluate your situation to see if working hard and staying patient may be a fruitful path for you.
One of the things that we all need to do, particularly at our day job, is to increase productivity. Unfortunately, I find myself at times checking things off the list but they aren’t the RIGHT things that need to be checked off.
It’s so easy to go into work, get pulled off track by a fire or email and never get back on track. I’ll leave at the end of the day knowing I was busy but truly wondering what I had accomplished.
Actionable Habit to earn more: Set aside the final 15 minutes of every day to select and PRIORITIZE the top 3-5 tasks that you must accomplish for the next day to be a success.
The first thing the next day sit down and start knocking those out. Avoid opening emails and putting out fires out until you absolutely must!
Budgeting
The dreaded “B” word. Budget. The fact of the matter is a budget is potentially the single most effective tool for growing wealth. While increasing income is great and keeps a lot coming in the door, a budget ensures that you maximize the amount of money that you get to keep. If you’ve never budgeted, trust me, there’s a budget for everyone.
I’ve been tracking every expense since January 2014. The key lesson I’ve learned in all my years of budgeting experience is that avoiding lifestyle inflation may be the single most important point in becoming financially fit.
I cannot emphasize enough the fact that lifestyle inflation may be the single greatest wealth killer. If all you do is never spend more than last year while your income keeps grows its just a matter of time before your wealth starts growing by leaps and bounds.
The single best way to avoid lifestyle inflation is to budget, budget, budget!
Actionable habit to track expenses: every day take 5 minutes and categorize your expenses!
There are so many tools out there to use. You may think this is difficult but those 5 minutes every day will pay big dividends over time.
Saving & Investing
If you are growing your income and budgeting, saving should be happening naturally. If it’s not, stick with it. Just by reading this blog I know you are on the right path.
It may not be easy but it will be worth it. Never forget that if you truly want to live a 1% life then you’ve got to be willing to put in 1% work.
If you’ve got a savings account that you don’t quite know what to do with you are off to a FANTASTIC start! The next step is to put it to work by buying assets that will grow on their own.
All of the great investors or business people grew their wealth by investing in assets or owning their own business. If you are just starting out I’d recommend investing in assets and leave owning a business for further down the road.
While my blog is not a place to go for this type of advice, there are countless books and blogs that can teach you everything you need to know about the options to invest in assets (editor’s note: here are my favorites!). While all that information is out there a small percentage of people take the time to read it, learn it and apply it.
Actionable habit for saving & investing: Spend 5 minutes everyday reading, learning, and diving into investing books, blogs, podcasts, and forums.
You can become financially fit with small changes over time
Just five minutes a day will add up to 30+ hours a year learning specifically about investing. Start now and know where to put your money when you have it ready to invest!
The key to habits is that they are small steps in the right direction that happen frequently. If you don’t make some quick progress just be patient, stay on the path and you’ll get to where you want to go!
It’s been great sharing some thoughts with you. If you have thoughts, comment or questions never hesitate to reach out on twitter @eatmoneyblog or email me at eatmoneyblog at gmail.com
(Photo courtesy of Steve Wiechman)
