Introduction
In the fast-paced world we live in, achieving financial fitness is essential for overall well-being. This month’s episode of Fitness Friday, hosted by Lisa Larson and Rasha Proctor, dives deep into how financial health impacts our stress levels and mental wellness. With expert insights from wealth advisor Laura Vollrath, listeners learn actionable strategies to enhance their financial fitness and alleviate money-related anxiety.
Understanding Financial Fitness
Financial fitness goes beyond simply balancing a budget; it begins with a complete awareness of one’s financial situation. According to Laura Vollrath, a wealth advisor at Avidian Wealth Solutions, understanding what comes in and goes out each month is crucial. This awareness allows individuals to adapt to life’s unexpected changes and manage their debt effectively. For instance, pulling your credit report annually can reveal not only your lines of credit and current balances but also help identify any potential fraud.
Establishing an Emergency Fund
One of the foundational steps in achieving financial fitness is setting up an emergency fund. Laura recommends aiming for three to six months’ worth of expenses, tailored to your household’s income situation. This fund should be easily accessible, perhaps through a high-yield savings account, and can provide a safety net during unexpected events like job loss or medical emergencies. Lisa shared her recent experience dipping into her emergency fund for an unexpected vet bill, highlighting the importance of being prepared for life’s surprises.
Investment Strategies for Everyone
Financial fitness also encompasses having an intentional investment strategy. Regardless of your current financial situation, everyone should have a plan in place for their money. Laura emphasizes that younger individuals can afford to adopt a more aggressive investment strategy due to the longer time horizon for potential growth. Conversely, those nearing retirement may want to be more conservative in their investments. The key is to align your investment approach with your personal goals and risk tolerance.
Tackling Money Stressors
Money stress is pervasive, even among high-earning professionals. Rising living costs and lifestyle creep—where increased income leads to increased spending—are significant contributors to financial anxiety. Laura explains that many individuals fall into the trap of upgrading their lifestyle without realizing how it impacts their overall financial health. Additionally, fear and avoidance play a role in money stress. Many professionals feel burnt out and prefer to ignore their financial situation altogether, which can lead to missed opportunities and increased anxiety.
Practical Tactics to Alleviate Financial Stress
To combat financial stress, Laura suggests several practical tactics:
- Build an Emergency Fund: Having money set aside can provide reassurance during uncertain times.
- Automate Your Finances: Automating bill payments and savings can help avoid missed payments and promote disciplined saving habits.
- Align Spending with Values: Redirect your spending towards what truly matters to you, ensuring that your financial decisions align with your personal goals.
Conclusion: Key Takeaways
Achieving financial fitness is a journey that requires awareness, planning, and intentionality. Building an emergency fund, developing a clear investment strategy, and understanding your spending habits are essential steps towards reducing financial stress. By applying these strategies, individuals can enhance their financial well-being and, in turn, improve their overall quality of life. Remember, just like physical fitness, financial fitness takes time and commitment.
Watch the full episode on YouTube
