Financially Fit—Are you?
Thursday, September 29th, 2005Like physical fitness, financial well-being takes regular effort and practice. Recent reports are indicating that the majority of Americans lack basic understanding of the fundamentals of personal finance. Few Americans truly understand credit scoring and what factors impact their scores. Over half do not regularly review their credit reports. More than one-third of Americans report they don’t budget to manage their monthly expenses.
With soaring gas prices and the resulting increases in the cost of food and services, it’s important to look closely at where your money goes. Do you know what you’re spending on groceries each month? Eating out? How many tanks of gas do you use in a month? Do you race back and forth across town because you didn’t plan ahead? How effective is your current savings plan? Do you have money put aside for an emergency or are you dependent on credit cards if something unexpected arises? Do you have a budget? Do you stay within it or are you regularly spending more than you earn?
Since Americans currently have billions in unsecured credit card debt, it’s probably safe to assume that most are not managing their money as well as they could. Sometimes it’s not about know-how but simply about effort. If you’re not sure why you come up short each month or after paying the bills, you don’t have anything left over for savings, it’s a good time to do a little personal evaluation.
Keep a record—-it’s really that simple. Start keeping a record of what you spend during the week or the month. See where your money goes. Once you know how you’re spending your money and are conscious of little spending habits that, over time, have big impact on your bottom line, you can come up with an alternatives.
Knowing where your money goes is the first step to being financially fit. Just like taking those first steps toward physical fitness, walking for 20 minutes after dinner or taking the stairs instead of the elevator, a little effort can have big payoffs down the road. Get financially fit!