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10 Steps for Improving your Personal Financial Fitness

Updated on December 23, 2010

What does personal financial fitness mean to you? Financial fitness is more than just having the money to buy whatever we want.

Let’s face it; our personal financial fitness is aimed at developing financial freedom.

Whether you are retired or still planning financial freedom is what we all strive for. It is the calm assurance that we are ok, that we are working to make our future is as financially secure as possible.

For retirement, there are things we all must do to ensure financial security and financial freedom.

1. Emergency Savings Account

Life happens, as they say and most of us are not as prepared as we should be for the emergencies that life can throw our way.  Creating an emergency savings fund is essential for everyone and should be a top priority.  How much you keep in this fund is a personal decision but being prepared could prove to be a life line in a time of need.  Experts say that your emergency fund should be enough to sustain your household for at least 6 months. 

Here are some of the types of insurance that you should look into.

  • Health insurance
  • Life Insurance
  • Disability Insurance
  • Auto Insurance
  • Homeowners/Renters Insurance
  • Long Term Care Insurance

2. Insurance Needs

Insurance is protection, plain and simple. We buy insurance to protect our assets, our home, our health, our cars and our lives. All of this protection is vital to our peace of mind and our financial future. Health costs can deplete even the hardiest of bank accounts during a prolonged illness and the death of a wage earner can devastate the finances of a family. Replacing a car after an accident can be a costly affair especially if other expenses are incurred at the same time.

3. Negotiate for a Better Deal

While you may not be able to negotiate the cost of your groceries in the store, you can shop around for the best deals. Don’t automatically settle for the first offer on items like your phone service or cable bill. With better deals always on the horizon, know what you want and what they are truly worth to you. Items such as property taxes, can even be negotiated. Paying the higher dollar does not always mean better quality.

4. Your Budget

The very best way to manage your money and your bills is to have a budget.  Sticking to your budget may be harder than you think but it can be done. In order to fully participate in any financial fitness routine, we should all know where our money is going each and every month. Tracking your spending can help you eliminate wasteful spending and perhaps help you save some money.  There are budget plans available and in our debt series we will be highlighting the different ways to budget your monthly income and bills.

5. Get Out of Debt

Getting out of debt has to be the top concern for all those who have debt. Debt is a topic that is on the minds of many Americans whether it is personal debt or our national debt. While we all talk about it, not everyone feels as though they can do much about it.

We have provided a proven method of eliminating debt for you – How to get out of Debt by Debt Stacking.  You will see a real example of how this plan worked for the couple in the article and how it can work for you without any added fees or investment.

Debt is a real problem so getting rid of it altogether will surely be a boost to your financial fitness.

6. Your Credit Score

Now more than ever, your credit score is valuable and needs to be protected. Your credit score will affect your ability to get loans, get credit and certainly the interest rate you will be charged. But it can also affect your insurance costs, signing a phone contract and can even affect your ability to get a job. Knowing your credit score and what is on your credit report is essential to keeping financially fit.

From Negative Impacts on Your Credit Score, here are a few things to keep in mind that will keep your credit score strong.

  • Pay all of your bills on time and pay as much as you can on any outstanding balance.
  • Keep your balance at or below 25% of available credit. Never go above 80%.
  • Stay employed. Employed people are viewed as better able to pay their bills on time.
  • Check your credit report regularly to check for any errors. If you find errors, get them resolved as soon as you can.
  • Don’t jump your debt around to a number of different credit cards. Being a loyal customer has its benefits. While the short term benefits may help, using this approach in the long run can hurt your overall credit score.

7. Increase your Monthly Income

The greatest asset you have is your ability to make money and increase your monthly income.  Whether this is by getting a raise, taking on a part time job or supplementing your income generating more income is better than any savings account.  This extra income can then be used to shore up your emergency fund or perhaps for investment purposes.  Alternative income streams such as online enterprises, mutual funds or owning rental property can bolster your monthly income by a substantial margin.  The key would be to diversify your interests. 

source: Moolanomy
source: Moolanomy

8. Invest in your Retirement

Make this a monthly or weekly habit. Investing in your future while you are young can reap you great rewards when you retire. With threatened cuts to Social Security system, you do not want to have to rely on those benefits alone for all of your needs when you retire.

Take it upon yourself to invest in your own future. Using compounded interest, within just 20 years, you can build yourself a very nice nest egg and secure your financial fitness through your retirement.


"If a person invests $15,000 per year starting at age 25 and the investment gains on average 10% a year, he can get to $1 million mark by 45. The first million took 20 years! But if you keep going down the table, it only takes…

  • 6 more years to get to $2 million at 51
  • 4 more years to get to $3 million at 55
  • 3 more years to get to $4 million at 58
  • 2 more years to get to $5 million at 60
  • 2 more years to get to $6 million at 62
  • 2 more years to get to $7 million at 64
  • 1 more years to get to $8 million at 65

While not everyone can invest 15k a year for 20+ years, this does highlight how starting retirement investing while you are still young can have long term benefits."

9. Saving Accounts

We have mentioned retirement accounts and emergency accounts but you should also have a high yield savings account.  These accounts grow your money using compound interest and allow you to manage your money.  With direct services and online banking, these amenities can make banking much easier.  You can link them to your checking accounts and keep them readily available for all your needs.

10. A Will or Estate Plan

This is essential for all of us.  Many of us believe that not having a large estate, we do not need a will.  This is just not the case.  A will tells your family and all interested parties, what you want done with the assets you leave behind.  The assets are yours and you have the right to distribute them as you see fit.  Especially if your children are young, you need a will to declare who you want to care for your children if something unforeseen should happen to you.  You want your children and assets protected.  Your will needs to be updated as your needs and the needs of your family change over the years. 

Keeping your personal finances healthy and strong takes real effort and for some it can be a struggle.  But the rewards will ensure your financial fitness for many years and into your retirement as well.  Remember, no one looks out for you and your future better than you do neither the government nor your employers.  Maintaining your personal financial fitness will provide you with peace of mind and a secure future.


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    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      You are welcome crystolite. Thanks for stopping by.

    • crystolite profile image


      7 years ago from Houston TX

      Good hub,thanks for sharing.

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Thank you Treasuresofjeaven. If not rich, at the very least... able to take care of ourselves for the rest of our lives. Your comments are most welcome.

    • Treasuresofheaven profile image

      Sima Ballinger 

      7 years ago from Michigan

      This is so good Joni. If we would but only follow these steps we'd all be rich. I guess one step at a time. You make a whole lot of sense. Great article and good reminder for me. Thanks!

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Thank you heart4theword. Our futures do depend on our actions today. I appreciate your comments.

    • heart4theword profile image


      7 years ago from hub

      Great tips to apply to our future! Our lives depend on it:) Appreciate your input! Finances are always a good hub topic:)

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Thanks Susie Duzy. So glad that you found help in this hub. I thank you for letting me know.

    • SUSIE DUZY profile image


      7 years ago from Delray Beach, Florida

      Good hub. I desperately needed this information.

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Hello Kaie, thank you for stopping by and adding your comments. so true...."Life happens when you plan something else."

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Thank you Wayne. You got it right buddy. Personal responsibility seems to be missing from so many people's lives. Do they even teach that anymore?

      Glad you stopped by and left such a great comment.

    • Kaie Arwen profile image

      Kaie Arwen 

      7 years ago

      I believe in investments, but haven't had much luck with it........... life tends to step in and make a mess of what I do! Great information as always. Thank you ~ Kaie

    • Wayne Brown profile image

      Wayne Brown 

      7 years ago from Texas

      Absolutely great information Joni and so well prioritized for people who have no sense of it. As Americans we must learn to invest in ourselves and that starts with savings, getting rid of debt, paying our bills, and planning for our retirement. Once we embrace these items and make room for them in our lives, our sense of independence begins to grow and we take on an attitude that steps far away from the "entitlement" mindset that is so prevalent in our society today. The only real security in America is the one that we provide for ourselves. You don't have to be rich to do that, just informed and disciplined. Given those factors and the willingness to sacrifice a bit here and there and the most powerful thing we can find in life suddenly starts to emerge...our own independence. What a great feeling of accomplishment and pride. Thanks for sharing! WB

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Why thank you reddog. I so appreciate your feedback. The debt stacking really works wen you stick to it and I wish you every success with it. I know others who are also using the plan.

    • reddog1027 profile image


      7 years ago from Atlanta, GA

      Your articles on personal finances are great. I am already using your hub on stacking and will be saving this one as well.

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Thank you SomewayOuttaHere. Glad you stopped by.

    • Joni Douglas profile imageAUTHOR

      Joni Douglas 

      7 years ago

      Welcome dahoglund, thanks for being my first commenter. You are absolutely right, grocers certainly might give a discount. Never hurts to ask anyway. Thanks so much for adding your thoughts here.

    • SomewayOuttaHere profile image


      7 years ago from TheGreatGigInTheSky

      ...good hub...

    • dahoglund profile image

      Don A. Hoglund 

      7 years ago from Wisconsin Rapids

      I wish I had this advice when I was young.In your statement that you may not be able to negotiate on your groceries. I once read that if you talk to the manager and offer to buy something like a case of canned good they might be willing to give you a discount. I did actually do that a couple of times


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