How do you become Financially Fit? No, just like we cannot snap our fingers and be physically fit, we cannot snap our fingers and be Financially Fit.

It is a process and a journey. Your efforts, skills, and mindset build on each other until you see the goal on the horizon. You realize being in the game is where it begins. And the beginning is often the hardest part. Once you commit and take the first step, you start to move in the direction of your dreams. You set the pace. It’s your life and you get to choose how you live it. So, let’s talk about three basic steps to start you on the path to Financial Fitness and ultimately Financial Freedom.

Fun vs. Fear

Before we start with the steps though, I want to talk about fun vs. fear- whether it is in regards to Financial Fitness or Physical Fitness. I work out at Primal Fit, https://www.primalfit360miami.com/, an awesome gym that offers small group strength training and conditioning classes. Billy Casimir (that’s Billy in the photo with me. Billycasimirfitness on Instagram) is the personal trainer who teaches most of the classes I take.

To say Billy makes fitness fun- well, that’s an understatement. Sometimes, even when I am feeling the burn of a particularly challenging workout- Billy has me in stitches. Plus, he can sure pick a playlist.

This past Thursday, May 12th, Matt Pack, the owner of Primal Fit, hosted a client party at the gym but not just a party- a Miami Vice themed party! So, out came my 80’s inspired shiny black pants, and pastel pink, including my pink handcuffs from my former Federal Agent days. The vibe of the party was pure high-energy and fun!

Sometimes, we choose not to do something because we fear it. Fear that we don’t know where to start, fear of feeling foolish, fear of not being good enough, or fear of failure. I say it’s time to put fear aside and get in the game of Financial Fitness. I believe finances are fun and we can lean into the joy of money. Why? Because the freedom you feel when money is no longer a cause of stress and anxiety in your life is blissful and definitely fun!

Step 1– Financial Snapshot

Take your financial snapshot. Financially, where are you right now? You cannot know where to go in your financial life if you do not know where you are now. Remember, get rid of the fear. Having your head in the sand or only peaking at your finances makes things unclear and foggy. When it comes to your money matters, get rid of the smoke and mirrors, and then you can see clearly.

When taking your financial snapshot, leave judgment and shame at the door. There is no place for judgment or shame when you are working on getting your financial house in order. Start by assessing all your incoming funds each month. From where do you receive income? Is it only one source, or do you have multiple streams of income? (multiple streams of income help you to get Financially Fit and Financially Free sooner- that will be covered in a future blog post.) Write down the total of each source of income and then get a sum total of all incoming monthly funds.

Totaling Monthly Expenses

Next, write down all your monthly expenses. If you do not know the amounts, track your expenses for a month.

• 💵Necessary living expenses (housing, food, medical, etc.).
• 💵Mandatory payments (car payments, student loans, other loans, etc.).
• 💵Pay yourself first expenses: emergency fund, savings, retirement accounts, and any other investments.
• 💵Other necessary payments (car insurance, pet food, home repairs, etc.).
• 💵Any debt payments that are not included above. Know the total amount of each debt.
• 💵Discretionary expenses (going out, non-essential purchases, travel, etc.).

Get a monthly total. I know these expenses can fluctuate based on the month but get a solid base for your monthly expenses.

Know What You Have

Write down the total of your emergency fund, any additional savings, retirement investments (401Ks, IRAs, etc), and any other investments you have.

Know your insurance benefits, coverages, and co-pays. Check your health insurance, car insurance, home insurance, and any other insurances you have.

These calculations will give you a Financial Snapshot of where you are right now.

Step 2-Monthly Budgeting

Monthly Budget. Two words that are integral to getting on the path to Financial Fitness. Take your monthly income calculated above and subtract your monthly expenses. Does your income cover your expenses? If not, you are over budget. Being over budget has multiple effects on your financial life. One big issue is it can cause debt. Beyond debt though is fear, anxiety, and uneasiness that comes when we are living above our means.

Also, as noted above, monthly pay yourself first “expenses” such as emergency fund, savings, investments, and retirement (the younger you start the smoother it goes) are part of a monthly budget. Even if those amounts are small in the beginning, you are creating good money habits. As your income increases, you increase the amounts of those “pay yourself first” categories.

One of the sentiments I often get when I initially talk to my clients about budgeting is that budgeting is boring and/or stressful. My belief is that a budget creates freedom in your life. Freedom is not boring or stressful. A budget also creates awareness. Until we are aware of where we are and whether our money habits are serving us, it is difficult to move forward. I say budgeting is beautiful because it helps allow me to live the life I choose.

Step 3-Mindset

Your money mindset is a key element to being Financially Fit and ultimately Financially Free. You must believe in yourself- it all starts with your thoughts. No matter what your financial situation is at the moment, know that the person in charge is you. When this really resonates- it will be a light bulb moment!

When you become financially responsible you ultimately become financially free. Where once money caused stress and anxiety, you can now create space and peace in your life.

Start the journey, put fear aside, and lean into The Joy of Money.

Sincerely,

Susan Howell, The MoneyMaestra