Financially Fit vs. Wealthy: 5 Financial Wellness Tips

A common misconception is that more money means better financial habits. That’s not always true! We explore the difference between being wealthy and being financially fit, and share how to take control of your finances at any wealth status.

What Does It Mean to Be Wealthy?

The term “wealthy” is used to describe a person’s financial assets — when those assets are abundant. While it’s never a bad thing to have financial abundance — in fact, most people strive to create wealth — there are many misconceptions about what it means to be wealthy. For example, having wealth doesn’t directly translate to financial health. Likewise, you can be financially fit with modest or minimal financial assets.

Financial fitness is more about taking control of your finances rather than how much cash or assets you have to your name. That means anybody can be financially fit! And, even better, when you master money health, you’ll automatically be on the path to a financially secure future.

These financial wellness tips will help you flex your money muscle and reshape your attitudes about wealth.

1. Stress Test Your Budget

Tally up your regular monthly expenses, including mortgage or rent, utility bills, groceries, average entertainment expenses, etc. Compare your spending to your monthly pay. If your expenses are continually surpassing what you make per month, that could be a sign of an impending debt spiral. Trim spending where you can, and regularly check in with your budget to make sure you’re sticking to it.

2. Slim Down Your Debt and Reliance on Credit Cards

Many Americans have some type of debt, whether that’s a mortgage, car loan, student loan or credit card balance. Having some debt doesn’t automatically flag you as financially unhealthy. But if you keep accumulating balances and high interest, debt can snowball into unmanageable territory that eats up your budget. To build financial fitness, all you have to do is make a plan to pay off high-interest debt like credit cards and find ways to reduce your reliance on them.

3. Strengthen Your Emergency Fund

Part of being financially fit is having an emergency fund to turn to when the unexpected happens. You can set mini milestones before building up to the recommended three to six months of expenses. If you don’t have an emergency fund, start by opening a savings account and setting up automatic weekly transfers of a small amount — even just $20. Make your emergency fund off-limits for extraneous expenses.

4. Train to Reach Your Short- and Long-term Goals

Your emergency fund should remain untouchable unless you have an actual emergency. But you will likely have other costs in your life that fall outside of your regular budget. Maybe you’d like to take a trip, buy a new item or do a home renovation. Having a separate savings fund and planning ahead for these goals can help keep you financially fit.

5. Build Your Wealth Health

Your emergency fund and savings goals are just part of your whole wealth picture. Don’t forget to save for retirement via a 401(k) or an IRA. Plus, you can build wealth via additional investments.

Farm Bureau Can Help

If you’re new to investing, your friendly Farm Bureau advisor is always standing by to help.