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Are You Financially Fit?
By Joan Peterkin
Are you financially fit? If not, can you become financially fit? What does it mean to you to be financially fit? Financial fitness is very personal and can only be determined by you.
Just like your physical fitness your financial fitness is as important and should be as equally high on your list of things to do. The strength of your financial fitness contributes your physical fitness also.
Financial fitness starts with debt management. Do you have a debt problem? Do you have high interest, unsecured revolving debts? If you do, this is the first place to start on your journey to financial fitness. Reducing, controlling and eliminating these kind of debts will contribute greatly to your fitness journey. Eliminating high interest credits cards debts will turn off the tap which has your cash going down the drain.
There are several ways to reduce your debt. First, debt reduction must start with purpose and benefit. You must determine why you want to reduce your debt. How will you benefit from having a reduced debt load and what impact will these benefits have on your quality of life, long and short term. By knowing why you want something and how you will benefit from having it, is part of "psyching" up yourself. You become emotionally committed to the task and are willing to see it through. Now, you can create a plan which works for you and helps you to achieve your goal.
Get started by recording all your debts. This lets you know where you are now. Decide when you would like in a better financial place. Get started and track your progress.
Consolidate your debts to a lower interest rate - you can ask your bank for a consolidated loan. This loan should be an amount enough to pay off all your credit cards, personal loans and line of credits in full. Try to negotiate the lowest interest rate possible. Remember the interest rate you qualify for is also determined on how creditworthy you are.
Another option is Independent Debt Management companies who specialize in helping middle income consumers choose a debt management process that is best for them, often at a lower cost than the banks. Do your research and find one who fits your needs.
Now, get rid of all your cards except one. The one you keep should offer the best interest rate and annual fee. You should only use your card for emergencies while you are on this journey of financial fitness.
Refinance your house - By using the equity in your house to pay off your credit cards, student loans and personal loans will help you to qualify for a lower interest rate. Your high interest debts are now secured by your home. You are now paying less in interest and your monthly payments made on your debts are reduced.
Protect your credit rating - If you do not qualify for a consolidated loan or you do not have a house with equity for refinancing, all is not lost. You just have to make a decision to become debt free on your own. Become disciplined with yourself and your spending. Develop a debt free plan that works for you.
You can start by listing all your debts in order of amounts, interest charged and balances. Call all your lenders and ask them to reduce your minimum payments requirements, they will be very happy to help make your payments easier.
Now that your monthly minimums are lower, you will have increase cash flow to start the "paying off process".
By paying off your lowest balance first, then the second lowest balance, then the third lowest. As you pay off each card, you can add that payment to your next card. With this process you will see results quickly and you will be more encouraged to continue. Reward yourself with a non-credit gift each time you pay off a card. You have earned it!!! Track your progress and before you know it, you will become debt free!
Now your disposable income can do more for you. You are back in control of your cash flow and should be able to re-direct it to saving for emergencies, retirement, vacation, new home, gift, education.
Track your spending on everything: lunches, coffee, clothes, dinners, entertainment, gifts, all your wants and "must haves". Look for areas where you can make creative cuts. Small cuts can make a big difference. Use only one credit card and try to pay the full balance each month.
You can and should make your financial fitness a priority at all times. Your financial fitness contributes to your physical fitness, your current lifestyle and future security.
Copyright 2006 Joan Peterkin. All rights reserved.
About the Author
Joan Peterkin is President and Founder of Wealth Initiators Inc., providing a fresh approach to financial freedom that gives families a better understanding of their financial choices. Joan helps families, in Ontario, Canada, transition from being in debt to building long-term wealth and financial security. Get her FREE report "The Top 7 Reasons to Live a Debt-free Life" by sending an email to: mailto:wealthinitiators@sendfree.com . For more information, visit Joan's website at http://www.WealthInitiators.net or call 416-497-6786; toll-free: 1-866-410-6099.
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