Your Financial Fitness Regime

The desire to be physically fit and have perfect bodies has caught on the fancy of so many of us and we do everything to get that impressive silhouette. Do you know that for you to be fit in the true sense of the word you need to gear up your emotional and financial fitness too? You can do very little for the former because its so very dependent on the latter two; amongst the latter categories, the former is dependent to a great extent on the latter. So ultimately, it’s your financial health that you’ve got to look into to take care of your fitness in totality. Nobody’s got a six pack abs, just by doing nothing. All those guys out there have exercised their muscles well and got results by following a diet and fitness regime. So if you want to be fit, following a regime is a must.

Financial fitness is akin to physical fitness and only by following a fiscally disciplined lifestyle; you’re going to become totally fit. According to Business Matters, a discussion was held at the Greater Tallahassee Chamber of Commerce by the Professional Women’s Forum and their conversation orbited around the factors that determine financial health. According to Cecilia Homison, CEO, Florida Commerce Credit Union, mainly three factors contributed to financial health- a good credit score, improving upon present savings, and saving for retirement. So, if you need to be financially fit start your fitness regime now. Here are some exercises that I’m prescribing for you like a financially fitness trainer. Follow the regime religiously and you’ll be a model…oops! Not one with a great body, but with great finances!

So welcome to my financial gym! Lets take tour of my gym and see how you can work out for that financially fit you:

I would like to take you first to the credit score improver.

Credit Score Improver

The credit score improver is going to suggest a set of exercises that you need  to tone up your credit score. Here are those exercises:

• Don’t let your payments get delayed by more than 30 days because 35 % of your credit score is calculated on your debt history beyond 30 days. Keep it within this time range and you are safe.
• Don’t cancel your card, however old and/or unused it may be because it is integrally linked to your credit history. Also, keep your account open as that’s going to show your debt/credit statistics. About 30 percent of your credit score is dependent on this.
• Don’t let your credit card rust – you might take pride in the idea of not taking a single item on credit and you always pay with cash. It’s nice to know of your financial power. But this does not ensure you of financial fitness. If you simply take a credit card and not use it, you are not esteemed in the eyes of the lender. In fact they take it as an example of bad credit and that lowers your credit score. Better use it occasionally and make payments within the permissible period.
• Don’t apply for credit cards at random as it creates a bad impression about your financial health. You might be blissfully ignorant about the fact that applying for too many card at a time shows about your buying capacity and hence good financial health. But this is not so. On the contrary it might send the wrong message that you’re in a big debt and applying for loan from more than one source.
• A good way to build up on your credit scores is to buy a card for a family member and use it efficiently. Now, with entire America screaming about financial literacy for children, don’t you think you can avail this opportunity to teach your child how to use the credit card properly-something that most school and college kids don’t know about? Go and get your child a low-limit credit card today, so that he doesn’t get the access to big money which he might misuse owing to his tender age and at the same time he gets a lesson or two in money management.
• Please don’t check your credit scores at any online portal- at least the free credit reports ones as they don’t yield reliable results. Always go to the credit offices to check out your score or visit government authorized websites.

After your workout at the credit score improver, you can move over to the next set of equipments of my financial gym – just the way you move from the treadmill to the abdominal toner in a physical fitness gym . Welcome to the Frugality machine!

The Frugality Machine

You might have come across hundreds of articles that tell you how to save up on your money. You might have already asked your financial expert about the different ways in which you can save up money. Well, all those tips are there and I think more than anything else, you’ve got your commonsense to work up your own money saving strategies. But here I’d like to talk about the process of budgeting itself.

• Make up your individual strategy – Many times I tried to follow my friend’s style of budgeting and slashed up my expenditure exactly on those areas that she did. The results were disastrous- the reason being simply that both of us are different individuals with different psychological make-ups and lifestyles. During this recession she unemployed her domestic help and did all the households chores herself. I followed her example and did the same. But I could not manage because being a working woman with children and not being of a very robust constitution health-wise. I could not manage the show at home.  Well, this is just an example. I know many of us don’t employ domestic helps out here.
• Budgeting does not mean slashing out your expenditure on every thing and anything. That’ll make your life miserable. Good money saving is all about focused budgeting which involves identifying two key areas where you spend the most and cutting expenditure in these areas. Spend normally on other areas. Why you need two and not one or three key areas for budgeting is because, if you have only one area, you might come across an inevitable expenditure in that area and all the budgeting you’ve done till then will go down the drain! On the other hand, more than two is too much!
• Lastly, don’t cut down upon entertainment entirely as then you’ll only be depressed.

I know you must be already sweating with this work and let me congratulate you on that because you’re on your way to complete financial fitness. Just one more exercising system to work on and you are all set for sound financial health!

Meet the Retirement Saving Machine!

The Retirement Saving Machine

Old age and retirement are inseparable companions. Most of us take this phase as the gloomier side of life and don’t even want to think about it because we think that during this period as our capacity to earn ceases, we have to lead a dependent life. In today’s world where morals and virtues are ‘old-fashioned’ and ‘obsolete’ concepts being financially dependent on other people can be the worst thing that can happen. Even if your children promise to take care of you and you don’t find the need to save up for your retired days, I’ll say that it’s better to be self reliant. So go ahead and plan for retirement. Here are some ideas, even for late beginners.

• Planning for retirement is pretty simple. You don’t need to be a financial geek to get your retirement figures right. Just sit back and think about your present lifestyle and how much money you’re spending a month to maintain such a lifestyle. This should give you an estimate of how much money you’ll need after retirement to maintain your present lifestyle. Then use a retirement calculator to make all those calculations and get your accurate figure.
• List out all your income gateways other than your salary. It can be your social security income, insurance benefits or tax benefits. Sum the total external sources of income and make a realistic estimate.
• Just work up on your targets and try to reach them as soon as possible.
• If you are covered by a 401(k) or 403(b) schemes by your employer try to hike your contributions by the maximum permissible limit set by the financial and legal systems of your country/place.
• You might be already aware of the Roth IRA schemes. Just try to avail them as they are tax deductible in addition to your 401(k) and 403(b) contributions.
• Investing in stocks and mutual funds from reasonably authentic sources is something even a 40-plus year old can start with.
• Last, but not the least, clear yourself of all your debts. Start making full payments on your credit cards while the sun is still shining on the haystack. Get out of the habit of paying minimum  balance or postponing your payments because that will only add up to your final debt which will show up after you retire and then all your retirement savings will be directed towards paying up those bills.

That completes the set of modules that you’ve got to take up in the financial fitness gym. Just try! Initially, you’ll find it hard just like in any other gym but don’t stop. You know that even if your calves pain initially, you’re going to get used to the exercising regime and make yourself financially fit. Step out into this world as confident and as cheerful as ever.