Financial Fitness - What Does It Mean To Be Financially Fit?


     At Shepard Law, we help individuals and families take their next big step in life, whether that step is buying a home, refinancing, or creating an estate plan. All of these big steps have one, major thing in common - financial fitness. We all know how challenging it is to purchase a home without adequate finances, or how confusing it might be to establish an estate plan if you're unsure about how to manage your finances for the long term. This blog discusses what it means to be financially fit and offers some tips to help you build your financial confidence, for both the short and long term.

What does it mean to be Financially Fit?

     Financial fitness means feeling confident and secure about your financial situation - Managing your money in a way that allows you to meet not only your current needs but your long-term goals as well. According to the CFA Institute, there are seven steps to achieve peak financial fitness. Let's check them out together.

  • Set financial goals.
    • Goals cannot be reached if they are not set!
    • Plan how to use both your savings and investments.
    • Calculate how much money needs to be saved over time to reach your financial goal.
    • Alongside your financial goal, including an emergency fund will act as a 'buffer' if there is ever a worst-case scenario.
  • Understand where your money is going.
    • The first step to successfully reaching your financial goals is by creating a budget. This budget should include necessities, required expenditures, discretionary items, and savings in order to push your financial goals into victory.
    • Track and compare your spending to your budget. By comparing your spending to your budget, you'll have an easier time identifying where changes in spending habits will be most helpful.
    • Use gained knowledge throughout time to spend less money where possible and invest in savings.


  • Manage your debt.
    • When trying to optimize savings, curtailing the use of dept to consume is crucial.
    • Avoid potential fees and high-interest rates by minimizing the use of credit cards.
    • Establish a strategy to manage, reduce, and eventually eliminate any high-interest debt. This can be done by "Fast-tracking" the payment of any high-interest debts such as student loans or a mortgage.
  • Put your finances on autopilot.
    • Use direct deposit to siphon money into your savings account, this way the money is not easily spent. "What's out of sight is out of mind."
    • Monitor your regular contributions to your retirement fund or other investment accounts. These accounts should be monitored to ensure growth is going according to plan.
    • For recurring bills, autopay can help with ensuring your bills are paid in full and on time! Late fees should be a thing of the past when paying for your recurring expenses.
    • Look into an accountability tool such as an app on your phone! These tools are made to be easy to use and helpful for tracking payments and spending.
  • Maintain a steady lifestyle.
    • Whenever we experience an increase in income, many people experience excitement about the increased spending they'll be able to do, however, maintaining a steady lifestyle relies on keeping spending low and savings high, no matter what your income grows into.
    • Invest any bonuses or income growth into savings or investment accounts.
    • Keeping your expenditures relatively consistent over time encourages increased savings.
  • Invest wisely.
    • Establish a low-cost, globally diversified portfolio that's helpful when used to achieve both long-term and short-term goals.
    • Think in the long-term and don't become overly concerned about the short-term performance of investments. Stick to your investment plan and glance at your portfolio periodically to ensure you are staying on track.
    • Use a diversified portfolio of stocks and bonds to achieve a positive return in terms of your confidence when taking a financial risk. aka: Practice makes perfect!


  • Obtain knowledge and advice.
    • Understand and utilize best practices when saving and investing. Best practices are generally broad, but a great guide to follow when starting. The longer you follow the main principles of saving and investing, the more knowledgeable you will become in terms of what works for you.
    • Gain knowledge from a financial/investment advisor. If you are unsure of how to build an investment plan, asking for assistance from an accredited financial advisor may be a helpful step for you. They'll ask about your investment goals & financial needs and will work alongside you to create a plan that fits your specific desires. Usually, an advisor will also offer a fountain of financial knowledge along the way.

     Whether you are considering purchasing a home in the New Year or getting started on your estate planning journey, being financially fit will help you tremendously in any and all of your endeavors. Even if you are not in the market for a new home in 2022, it is always a great time to begin your journey towards financial fitness and to set goals for your financial future. Once your financial goals have been met, Shepard Law will happily help you close on the home of your dreams, refinance your current home, or provide a secure and determined future for your family and assets through estate planning. When you've reached your financial fitness goals, we're just a phone call away! (704) 280-9488. Good luck and we hope these tips and tricks are helpful.


Sources: CFA Institute. (2017). 7 Steps to Financial Fitness. Charlottesville, VA; CFA Institute.

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