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10 Tips to get financially Fit
By MyBudget Editor

Are your finances feeling a bit flabby? Are you ready for a financially fitter version of yourself? Discover how to lose the debt and put on some serious money muscle! 

Experts say that if you want to lose weight, the key is not to go on a fad diet but to put in place a system of healthy habits. Replace empty calories with nutrient dense foods. Create a daily exercise plan. Reduce the size of your meal portions. Get a good night’s sleep.

Financial fitness is not a lot different and, with that in mind, here are 10 tips that could help add up to a financially healthier you:

1. Get clear about your financial fitness goals

What are your life goals? What would you like to achieve with your money? What does financial security look like for you? Very few people take the time to get clear about where they want their money to take them. And with no clear destination in mind, they go nowhere. 

Just like physical fitness goals, it’s good to have a long-term vision to work towards—for example, a house deposit, retirement, starting a family or paying off your mortgage. But it’s also good to have short-term goals to keep you motivated along the way. Think: date nights, concert tickets, a new outfit, paying off your credit card. 

2.  Design a financial fitness plan

Just like going to the gym is more effective when you’re following a customised exercise plan, so is budgeting for improving your financial fitness. Your budget should track all of your spending and show how you plan to use your income. 

Like keeping a food diary, people are often surprised when their budget reveals how much they spend on ‘empty’ purchases and how easy it is to remove these from their financial diet once they have full visibility of their spending habits.

Download your free Budget Template and Workbook.

3. Adopt a financial fitness system

How do you turn goals into results? If goal achievement were as easy as writing goals on a Post-It Note, we’d all look like supermodels and fly around in private jets, right? The truth is that goals are hopes until you support them with a system. 

But not all systems are the same. It’s possible for two people to have identical income, similar expenses and the same financial goal, yet one is more likely to succeed. The reason is simple, yet powerful: one has a better system.

There are four foundations to creating powerful systems that support your goals. The best thing about learning these principles is that they don’t only apply to money—you can use them to improve any area of your life where you want to see change.

Discover how to automate your goals.

4.  Spend to live (not live to spend)

It’s a popular misconception that the key to being wealthy is a six-figure salary. It certainly doesn’t hurt, but the reality is that a lot of high earners fall into the trap of being high spenders. Lifestyle creep can be an expensive, stressful game.

In truth, financial fitness hinges much more on how much you spend than how much you earn. If you know how to live within your means, you can achieve financial fitness on nearly any income. It comes down to how well you control your spending because the less you spend, the more you can save.

5.  Target your problem areas

What are you paying too much for? Where could you cut back? When people first start budgeting, they’re often surprised to discover problem areas they didn’t know existed. 

One couple, for instance, discovered they were spending more than $8,000 a year on lunches and barista coffee. They started taking their lunches to work and bought a coffee maker for home and within a year had paid off their credit card and saved for an overseas holiday. 

As you begin to see your goals snowball, you’ll be motivated to set bigger and bigger goals. In fact, most people are amazed at what’s achievable once they get clear about what they want to achieve.

6.  Assess your debt health

Debt is like cholesterol—there are good and bad varieties! Going into debt for investments that go up in value (for example, real estate) is generally known as “good” debt. Whereas “bad” debt describes loans for things that lose value—for example, credit card debt for clothes and restaurant meals. 

The simple rule is to avoid bad debt by saving for the things you want and to pay down debts as quickly as possible, beginning with those earning the highest rates of interest. It’s also important to choose a debt strategy that suits your situation and personality.

Download your free Four Debt-busting Strategies for Every Personality eBook.

7.  Quit your plastic addiction

There’s no doubt that credit cards are convenient, but they’re also one of leading causes of financial stress. Like a restaurant buffet, they make over-indulging too easy. 

One way to quit your plastic addiction is by using cash to pay for your everyday living expenses. Withdraw the cash from an ATM at the start of each week and use it as a visual reminder of how your spending is tracking. 

8.  Get the right equipment

You need very little equipment to get financially fit, but the following tools certainly help: 

  • A dedicated, separate account for your savings—don’t let your savings get hi-jacked by your bills!
  • A transaction account for your everyday expenses and direct debits—some banks allow you to set up sub accounts. At MyBudget, we organise your income into streams.
  • A purse or wallet in which to carry the cash you’ll be using instead of plastic! 

9.  Strengthen your safety net

What would happen if you lost your job or were unable to work? Do you have savings to fall back on? Or do you rely on your credit card to make ends meet? Operating without savings is like walking a tightrope without a safety harness. 

Your aim should be to have at least one to two months’ salary saved up. That might sound challenging, but the key is to start small. Even just $10 a week would add up to $520 over a year. Or you could set aside your tax refund.

Read it now: New tax rules and what to do with your refund.

10.  Find a training partner

You know those days when you don’t feel like doing exercise but you already told your friend you’ll meet them? It’s the same with financial fitness. 

It can be incredibly motivating to share the journey with a friend who wants to get financially fit with you. Even more so when you join an entire community of like-minded, budget savvy, financial fitness focused Australians!

That’s why MyBudget is the ultimate financial fitness accountability partner. Our mission is to help you get financially fit by first designing a customised budget plan and then providing the tools, system and support that does the heavy lifting for you.

Call 1300 300 922 to speak with a money coach or enquire online to get your free customised budget.

Read more about getting out of debt, download a budget template, discover how MyBudget works, sign up for money tips on the MyBudget Blog or follow MyBudget on Facebook.

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