3 Steps to Become Financially Fit This Year

Being financially fit is more than just budgeting; it is maintaining your financial goals and ultimately getting where you want to be.

It’s a new year which means new beginnings and resolutions. A great resolution for the New Year is to challenge yourself to become financially fit.

But what does it mean to be financially fit?

It can look different for everyone – for some, it may be paying down debt, and for others it may be focusing on retirement or growing your family. Focusing on becoming financially fit can offer peace of mind, but what are the steps to get there? We share our top three goals to help you get started.

Step 1: Set Your Goal

The first step is to decide what it is you are trying to achieve. What are your financial plans and goals you want to reach in the new year? Once you decide on your direction, create a realistic plan that works for you. Your plan could be as simple as saving a little extra each month so you can vacation guilt free or adding a little extra monthly towards a debt to pay it down faster. Whatever it is, know that it is okay if it takes time to get there. Most financial goals do.

For larger goals, create stepping stones to help you reach the finish line. For example, a down payment on a home or retirement, probably will not happen quickly. Breaking up this goal into small goals will help it feel more attainable.

If you are aiming to put $10,000 down for a home but you have nothing saved yet, break it down into a realistic amount you can put away each month to get there. You can create check points throughout the year to make sure you are staying on track, then celebrate when you reach your smaller goals. Having the smaller goals will help you stay motivated while you work towards your long-term goals.

shutterstock 245737765 (1)

Step 2: Plan It Out

Once you know what it is you are trying to achieve, re-evaluate your current budget. Where can you save? How can you adjust to reach the goals you have set for yourself? This is where budgeting and diligence come into play. Looking at your budget to see where you can free up funds will help you in the long run in achieving your financial goals and becoming financially fit. Areas to work on or adjust within your budget are:

  • paying down debt
  • planning out your fun money
  • focusing on improving your credit score
  • saving where you can

Step 3: Put It into Action

No one likes being in debt, but for most it is a reality, especially if you are looking to build or maintain your credit score. What are some ways you can eliminate your debt? There are a couple different approaches.

  1. Focus on paying off the smallest debt first then pay that amount to the next smallest debt.

  2. Focus on paying off high interest debt first then pay off the next highest interest debt.

  3. Focus on paying the one with the shortest amount of time left, then give to the next shortest amount of time.

With each of these solutions, choose the one that you will benefit from the most.

Being mindful of how you spend your excess funds can take a lot of practice. If one of your fit goals is to free up funds to reach a financial goal, you may want to consider this tip. This does not mean cut out any spending all together, but to limit yourself.

For example, maybe you currently eat breakfast and lunch out daily. Preparing one of these meals at home will help you save. Tracking how you spend will show you where you can cut spending. You can also adjust how you spend. If you really love your morning coffee made by someone else, try getting it once a week rather than every day, for example. Choose the approach that will help you be successful. Afterall, you are the one to hold yourself accountable. You’ll want to set standards you know you can achieve. Just like a diet, if you want to incorporate more veggies throughout your day but don’t like broccoli, don’t eat the broccoli. Choose what you do like to eat.


Freeing funds up is important but building or maintaining good credit can also help you achieve your financial goals. Having a good score will help to provide better terms for what you are purchasing. Even if you aren’t planning on purchasing something that requires credit, this may just be a financially fit goal for you! Ways to better or maintain your credit score are:

  • Make payments on time
  • Keep credit card debt below 30%
  • Keep your overall debt to income ratio below 43%

There are other factors as well to building your credit. Working on bringing your score up if it is not where you’d like it to be can take time as entities only report once in a 30-day period.

As always, save where you can. This could be adding a portion of each paycheck to your savings, IRA, 401k, or any combo. If you can’t save a lot initially, it is okay to start small and build as you are able to put more away. This will help prepare you for future down payments, emergencies, or retirement.

Like any workout routine, being financially fit is something you need to practice often. Remember, create your goal and add stepping stones for the larger ones. Evaluate what you are currently doing and how you need to adjust to reach your goals, and then put it to action! Download our Interactive Budget Worksheet to help you get started on your journey.

Stay in the Know

Get Financial Tips and Updates in your Inbox.

Email signup form

By subscribing, I agree that Vanderbilt Mortgage may contact me by telephone, provide me with marketing communications about Vanderbilt Mortgage products and services, and share my contact information as described in our website terms.