First of all, what does it mean to be financially fit and why is that important? Being financially fit is understanding your current financial situation, setting goals for the future and having confidence in your ability to make financial decisions (even if that’s with the help of a trusted financial professional). Being financially fit will increase your health as it reduces stress and anxiety, and empowers you to make smarter decisions that have a positive impact in all areas of your life. Follow these five steps to get started:
- Master Your Cash Flow: Spend less than you earn. Easier said than done sometimes, but critically important. Awareness is the secret to success in this area. Can you answer these questions? What is your total monthly net income (net meaning what actually shows up in your bank account each month)? That is the easy question, the harder one to answer is: what are your monthly expenses? It is important to include everything here, but that can be overwhelming as there are many one-time expenses that go un-noticed. To keep it simple, I suggest completing a cash flow worksheet. This will help you list all the regular expenses you incur each month. There are a few annual expenses that also need to be accounted for (ie. property taxes), so divide that number by 12 and ensure you put that money aside each month so you are prepared when it's time to pay the annual bill. The process of looking at incoming versus outgoing cash each month is an eye-opener for many. Be intentional with your spending! If you have a shortfall, you need to look hard at your spending patterns and see what you can cut back on.
There are only 3 ways to fix a cash flow shortage:
- Increase your cashflow
- Reduce your expense
- A combination of both
- Build Net Worth: A net worth statement acts as a critical, one-page snapshot of your financial health, listing everything you own (assets) minus what you owe (liabilities). Regularly tracking this figure allows you to measure long-term financial progress, identify areas for improvement, and make informed decisions, such as planning for retirement or debt reduction. Think of your net worth as an assessment of your current financial health. It’s not about judgment, it’s not about comparison—it’s simply about clarity. Because when you know where you are, you can confidently plan where you’re going. Use the net worth calculator to help get you started. This number is meaningless without knowing what you need it for, which takes us to step 3.
- Set and Achieve Ambitious Goals: What do you want to accomplish? Think big! If you don't set a goal, you are unlikely to achieve it. Most people want to pay off debt and save for the future, which is great, but I suggest being more specific. If retirement savings is your goal, you need to decide at what age and how much income per year do you want. Work with a financial planner or advisor to help brainstorm goals and build a plan to achieve the specific goals you desire. Need a little inspiration? Start by asking yourself what you would do it you won the lottery. You’d be surprised at how many of those goals can be achieved, at least a modified version of, without needing to win the lottery.
- Invest Wisely: Do you know what your investment options are? There is a big difference between GICs and stocks, mutual funds and ETFs. There are pros and cons to each type of investment, not to mention varying levels of risk and opportunity. Take the time to learn the basics so you can make better investment decisions and understand how those decisions impact your life goals. For example, a GIC is safe since your capital is guaranteed, but the interest rate is extremely low and doesn't keep up with taxes and inflation, so will do little to help you achieve your long term goals. Stocks come in many different risk categories, don't offer guarantees, but do have higher return potential than GICs and provide a better chance of achieving long term goals. Educate yourself on the various options so you can make informed decisions that will support your goals.
- Protect your family: Have you planned for the unexpected? What would the impact be if you were unable to work? What about if you were no longer here at all? Would there be a burden left behind or have you put a plan in place to take care of loved ones? Will Revenue Canada be the beneficiary of your estate? It’s important to look at the impact from potential scenarios to ensure you’ve got the coverage in place to protect your family and preserve your wealth. People tend to stress over money and finances, therefore put off looking at it. It's not as complicated as people think. Work with a professional to help simplify your finances and help you feel in control of them. Being in control is nothing more than having an awareness of your financial situation and taking action to achieve your goals. Follow the above and you'll be financially fit in no time. The rewards are great, what are you waiting for?
Ready to take the next step?
The 5 Steps to Becoming Financially Fit aren’t just ideas—they’re a roadmap to taking control of your money and your future. When you understand your cash flow, build your net worth, set clear goals, invest wisely, and protect your family, you create a strong financial foundation that supports the life you truly want.
FinFit90 is here to help you put these steps into action. Financial success isn’t about being perfect—it’s about being aware, intentional, and consistent.
Join FinFit90 today and start building the confidence, clarity, and control you deserve. What are you waiting for?
