What is fitness? Fitness is the state of being fit.
What is fit? Being “thin” or being in good physical condition. These are acceptable answers when talking about running, like I was last week. Today I’m thinking about a different kind of fitness. I’m thinking about a different kind of “thin”. A different kind of running.
What is financial fitness? What does it mean to be fiscally fit? Being “thin”, and running. Thin with expenses, and running away from credit.
Six weeks ago I started Dave Ramsey’s Financial Peace University (7 weeks left to go). A couple hours ago, I started reading Total Money Makeover, also by Dave Ramsey. I’m already 1/4th of the way through it.
In chapter 2 of The Total Money Makeover Dave uses physical fitness as a metaphor for financial wellness. I really liked that since I’m currently pursuing both.
I said it’s about getting “Thin with expenses”. What I meant is that I typically have spent what I make. Often times even have spent more than I make. How did this work out for me? Depends on how you look at it. On the bright side, I have lots of cool toys! Xbox, PS3, big TV, more computers than I can count, etc, etc, etc. The downside? I’m 22 years old, I already owe a lot of money to creditors, and I don’t have a house or anything valuable enough to justify taking on the debt in the first place. About half of my debt is my remaining student loans, and sure, they aren’t a BIG deal, but to me they are. I could have paid for all my schooling myself, in cash. Instead I wasted my money on movie theaters, bars, and a ton of restaurants. Not to mention the previously noted toys. The solution? Get “thin” with my expenses. I now take out $100 cash every 2 weeks. That gives me $50 a week to do anything I want. I can’t spend anything more.
What about running from credit? Well, the running actually happens in 2 ways. The first, I’m running away from additional debt. The second, I’m chasing down my existing debt. Like I said, I only spend $50 per week. The rest of my paychecks are going towards my debts by making payments that are obscenely over the minimum, and going into my savings to cover any surprise expenses.
So… I highly recommend attending a “Financial Peace University” class and/or reading one of Dave’s books. Everyone knows the concept, “Spend less than you make”, but how many people actually do it? I knew it. Therefore, I should be debt-free. Guess that didn’t work out…