Achieving Peak Financial Fitness

 

Yosemite National Park, where I’m pictured in the photo above, is one of California’s greatest natural treasures. This shot was taken across from the half dome at Glacial Point. A stunning viewpoint to say the least!

The beauty of Yosemite’s landscape and the majesty of the park’s stunning mountains are truly awe-inspiring.

Speaking of Yosemite’s mountains, the park is home several very impressive peaks. That includes Glacial Point, pictured above, which rises over 7,200 feet, soaring nearly 1 ½ miles above sea level.

Admiring the park’s majestic peaks got me thinking about something you might not expect…

Your financial fitness.

And more specifically, achieving your Peak Financial Fitness.

What, you might be wondering, constitutes your peak financial fitness? It’s a lot like physical training. Certain days, you work out your upper body. Other days, you focus on your lower body. And that combination, plus ample cardio, provides a balance that sets your path toward achieving peak physical fitness.

Achieving peak financial fitness is about working out your money. Maximizing your savings, diminishing your debt, making sound investments, and consistently contributing to your retirement are all critical elements of your financial fitness. And effectively balancing these factors is how you achieve Peak Financial Fitness.

But while many of us don’t hit the gym as often as we should, just as many of us neglect our financial fitness.

To help you achieve your Peak Financial Fitness, let’s take a closer look at the “work out routine” you should be putting your finances through on the regular…

Maximizing Your Savings

Few Americans are saving as much as they should be. Yet your personal savings are critical to making purchases, big and small. And more importantly, your savings create a financial buffer should you ever face unexpected hardship. In addition, your savings provide capital to make wealth-building investments and retirement contributions.

Looking to buy a home or a car? Even with financing, you still need a down-payment. Which means you need to save money.

Need to replace an appliance or buy a new computer? You need to save money to make those pricey purchases.

What if you (or your spouse) lose your job? What if you, your spouse, or your child suddenly falls ill? Health insurance covers less than ever these days, while healthcare costs continue to skyrocket. Your savings act as a financial safety net should you face one of these unfortunate scenarios.

Living paycheck-to-paycheck is how countless families fall into financial peril.

How do you save more money?

Figure out your monthly income and compare that figure with your reoccurring expenses. How much can you reasonably afford to spare? What “fat” can you cut from your budget to increase the amount you can set aside?

Decide what works for you and funnel that sum directly into your savings every month. If bank online, you can set up an automatic transfer directly from your checking into your savings.

Diminishing Your Debt

At one point or another, most Americans have carried some kind of debt. And truth be told, holding debt (assuming you eventually pay it off) is a key component of building a healthy credit record, which ultimately determines your credit score.

But the more debt you hold, the greater your personal financial risk. Particularly in the face of an unexpected financial hardship that leaves you unable to pay those debts. Not to mention paying debt services affords you less capital to contribute to your savings, invest, or put toward retirement. All of which are critical to your financial fitness.

How do you diminish your debt?

Your first and best defense is to avoid it in the first place. Only purchase items on credit when absolutely necessary. And when you do buy credit, pay off your debt as quickly as possible. When financing lager purchases, shop around the lowest terms available, and always negotiate to see just how far you can push the rate down.

Looking to buy a car? There are incredible financing rates for both new and used car purchases as well as leases. Make the effort and really shop around for financing deals or work with car broker – it’s their job to grind down dealers and ensure the lowest rates possible.

Own a home? Consider refinancing your mortgage. Not to take money out (again, you’re aiming to diminish your debt, not add to it), but to take advantage of better terms. Interest rates remain historically low and cheap financing dollars have never been more readily available.

Struggling with credit card debt? Look to transfer your balance to a card with a better rate. There are always deals, and often with creditors that offer cool giveaways and freebies for signing up. Consider a personal loan, either from a family member, friend, or even your bank. A loan from a family member or friend completely removes the debt for your visible record. But if you don’t have access to such resources, many retail banks also offer customers unsecured personal loans at far lower interest rates than credit cards.

As far as actually paying down your credit card balance, approach the situation the same as bolstering your personal savings. Compare your monthly income and expenses. Determine how much you can afford to spare, making budget cuts if necessary to free up additional monies.

Then mark funds specifically for paying down your credit balance. Again, if you do online banking, it’s possible to set up a direct transfer to your credit card company. This is good fail-safe to ensure you don’t fall prey to an impulsive decision to divert those funds.

Investments – Building Wealth

A huge part of realizing the true promise of the American dream is building personal wealth. To many, however, this concept seems like the exclusive domain of the rich and powerful.

But the reality is, anyone can build personal wealth. And by concentrating on increasing your savings and decreasing your debt, you’re on the path to amassing the capital necessary to make lucrative investments that will eventually build your personal wealth.

Meanwhile, there are plenty of sound, smart, and profitable investments available to would-be investors at all income levels. From real estate to stocks, bonds, and other securities to business and joint venture enterprises the opportunities are plentiful.

And when you’re ready, a competent financial planner or investment counselor can point you in the right direction.

Retirement – Planning For The Future

For many now in the working world, Social Security may not even exist when retirement age rolls around. And even if Social Security persists, the minimal monthly stipend will be nowhere near enough to cover even your basic living expenses.

Additionally, countless pensions and other retirement entitlement funds are being slashed or even completely eliminated. Knocking out another crutch once intended to support retirees.

And to top it off, people are living longer than ever. Breakthroughs disease cures emerge every day. While preventative, wellness-based medicine is quickly becoming the focus of modern healthcare.

All of which makes it imperative that individuals take the initiative to save for retirement. Yet far, far too many Americans are setting aside little, if any savings toward in general, let alone putting any funds toward retirement.

If this is you, it’s high time you corrected course. Fortunately, there are no shortage of opportunities… IRAs, individually sponsored 401Ks, self-funded pension programs, and investment trusts are all sound options.

And your personal investments, in addition to being wealth-building vehicles, also serve as income-streams that can help support you in retirement.

Are You Financially Fit?

Savings, debt-management, wealth-building, and retirement planning are all key components of financial fitness. If you’re falling short in any of these areas, it’s time to reevaluate your finances and plot a course toward achieving Peak Financial Fitness!