Financial health: What’s it, and are you fit?

Financial health: What’s it, and are you fit? | Aviva India Financial Planning Blog

While you’re truly aware of physical as well as mental health - as well as the importance of it - you might not have been paying the required attention to financial fitness. There’s no denying that it is extremely crucial to stay physical and mentally fit. However, it stands to reason that without an enabling financial situation, the former will not be attained in the first place.

For the sake of better clarity, let’s think of money not as something that you earn (and burn, sorry - we had to!), but as something that has a life of its own. If you’re struggling to keep up with your finances, then your money certainly requires a bit more endurance, so to speak. For that, all you need to do is make responsible financial decisions which ensure stability in the longer run, as opposed to being focused on one moment in particular.

Both physical and mental health, after all, follow the philosophy of the larger picture, ensuring that things stay stable over a longer period of time. So why should financial health not be viewed in the same light?

At its core, the concept is rather simple. You need to have enough resources not just to cover your needs for the present, but also enough to guarantee that your future needs will be met. Another factor to take into equation is how you these things will continue to happen, should anything untoward happen to you.

To make things simpler - these are the things you should be doing:

1. Focus on Savings

Without a doubt, you’ll have monthly payments which will eat into your salary. But that’s nowhere near being a good reason for not having healthy monthly savings. In fact, there’s no good reason for not having enough savings! Once you start to have a mindset that prioritizes saving, it will be the first step in having a healthy financial outlook - and you’ll start to be financially fit!

Related - Top Financial moves to make before hitting 30!

2. Think in terms of interest, not convenience

When you consider buying a new item, you probably think in terms of monthly payments to take away from the pain of a one time down payment. But what you might miss out in this whole process is how much interest you’ll pay in the longer run. Compound this with your monthly payments - and chances are you won’t be able to sustain yourself as well each month. This is also true for credit card use; it might be convenient in the short run, but if you don’t pay off your debt each month, then you’ll have painful interest accruing. And if you want to be financially secure you wouldn’t want any of it!

3. Have multiple sources of income

No, you don’t necessarily have to be an entrepreneur with multiple startups under your wings for this to be a reality. There is a simple solution that can cater to everybody: investments. When you make investments, you are ensuring that in the longer run there will be money coming in, without you having to make an active effort to earn it. That’s a big plus for financial fitness!

4. Go for a life insurance

Life insurance is an ultimate necessity - without this, you might stand at a risk of losing everything you could’ve gained with your well-thought-out financial plans! A possible future mishap never crosses our mind till it happens. But this doesn’t change the reality that the likelihood of such an event is way more than any of us would like to admit. The best idea here is to stay prepared should such a scenario ever arise. That’s exactly where a life insurance comes handy. Not only does it cover your entire family - financially - in your absence, but also ensures that you live a peaceful life (and afterlife) knowing that your family is protected.

Related - Life Insurance 101: All You Need to Know About it Works

That’s pretty much all there’s to becoming (and staying) financially fit. Now that you know the mantra, don’t wait too long before briging it into action!

AN OCT 30/18

 

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