So after taking a two year hiatus, I’ve decided to start running again. But that’s not all, my thoughtful husband signed me up for a stand-up paddle boarding class. (Yes, that's me in the picture.) Heck, I even bought new wrinkle cream! Yep, I’m moving toward retirement, but I don’t want to look like it.
I hope to keep working on my inside and outside so I can keep up with my super-spouse. I also want to be sure we can afford to enjoy our wellness into our later years. I don’t want to just sit around watching Wheel of Fortune eating chips, I want to be able to travel around in our camper, go hiking, keep up with grandkids, and have fun in my later years. These are the things that make my life enjoyable.
It’s often said that health and wealth go hand-in-hand, and I wholeheartedly agree. Here are a few simple tips to follow if you too are looking to get into peak physical and fiscal health.
Set Goals & Create Plans
In the same way that you would outline your fitness goals, such as lowering body fat, increasing muscle mass or improving flexibility, it’s just as important that your identify your financial goals. And while the specific goals may change over the years, your desire to set goals and commitment to achieve them should remain consistent.
When engaging in this exercise, the first question you should ask yourself is, “what is really important to me?” Maybe it’s purchasing your “forever home” or retiring with a certain amount in assets. Whatever the case, you must first determine what is important to you and establish that as a specific goal.
But here’s the thing, the key characteristic in achieving a desired result is not in the goal itself, it is in the process. So while it is important to identify what you would like to achieve, that is only a small part of the equation. There’s a popular quote by Antoine de Saint-Exupéry that says: “A goal without a plan is just a wish.” Don’t simply be a goal setter! Instead, determine what you want to achieve, set a date, then create a specific plan to get there.
Just as you need a balanced approach to your nutrition to maintain a clean bill of health, you must also balance your financial goals and commit to a strategic plan to reach them.
Take it Slow
My husband and some friends are training for a half-marathon. (Notice that I am not participating in that.) To build up to a run of 13 miles, they started out running shorter distances and focused on one long run each week. While the shorter runs increased some, the long runs are now increasing by a mile each week. Slowly, they are reaching their running goal without getting hurt.
If you’ve ever started a new fitness routine, you may understand how easy it is to get overly excited and come out ‘guns blazing’ rather than pacing yourself for what could be a long process. Most fitness experts recommend a slow ramp-up period to avoid injuries and make sure that the details (like your form and breathing) are correct before you begin the more strenuous work. If you’re like me and didn’t always follow that advice to the letter, you probably found out fairly quickly that your body doesn’t respond well to that type of stress.
Think back to when you first learned about the Food Pyramid. If you remember, at the base were carbs (bread/pasta/rice), followed by fruits & vegetables, meat & dairy and so on. Each level built upon the next. Your Financial Planning Tower works the same way. Your expenses, income, and emergency savings serve as the base, followed by longer-term savings, retirement/education planning and so on. Debt will cause your tower to lean to the side, so get rid of as much of it as possible. Once your base is stable, you can continue to build your tower up.
Maybe you’re planning to max out your 401k in anticipation of retiring in the not-so-distant future. While you deserve kudos for setting such an ambitious goal, make sure that you are not jumping too far ahead in your planning process. As with anything, having a solid base is essential and as it relates to your money, that base includes a fully-funded emergency fund.
You would never want to find yourself in an emergency situation (think 2008!) without access to cash simply because you prioritized saving for retirement over saving for the unexpected. And, unfortunately, I see this regularly.
While fully funding your retirement accounts is an important goal, make sure that you’ve established a solid foundation first. Otherwise, you may leave yourself vulnerable to financial disaster in the future.
Embrace the Struggle
It’s tough to stay motivated when your muscles are sore and you’re not seeing the progress that you expected. It’s even worse when you’re mentally exhausted from the day-to-day demands of life. This is when you have to go back to the question that you asked yourself in the beginning: What is important to me?
Let’s say, for example, one of your goals is to pay off your mortgage within the next 10 years instead of 20. Think about what eliminating that financial burden would mean for your overall budget and how that would affect other areas of your life. Consider what you could do with an extra $1000 a month. (That's $12K a year!) Maybe it means you renovate your home, take a much-needed vacation, or sock away more for retirement and quit work a few years sooner. Or maybe all of the above.
One exercise that I recommend is to make it visual. Find an image of a renovated kitchen or an exotic location that you would like to visit and save that as your screensaver, or print it out and place it on your refrigerator. Just like a FitBit tracks your daily steps, a constant visual reminder during those moments of frustration remind you that the end goal is worth the work.
Check Your Progress
No matter what type of fitness plan you engage in, it’s important to stop and check your progress. Some people record times, repetitions or amount of weight lifted; while others prefer a monthly workout fitness test. When it comes to checking on your finances, the same rules apply.
For your financial plan, you could measure your Net Worth, monitor your savings progress and keep track as you pay down debt. By tracking your improvement, you can reward yourself as you hit certain milestones along the way. Just remember, it doesn’t have to be a chore -- be creative and make it fun! Involve your kids by letting them color in blocks on a chart, have them create a collage, or let them put smiley stickers on your tracking page.
Borrowing from the old cliche: “what gets measured, gets done”, the important thing is to check and make sure that your plan is on track and you’re making strides in the right direction. There is no pre-determined timeframe that you need to do this in, you could choose to do this weekly, monthly or even just a few times per year.
For many people, the decision to focus on physical fitness comes as a by-product of wanting to live a longer and healthier life -- which is admirable. However, what is sometimes overlooked is the fact that the longer we live, the more important our finances become -- particularly as it relates to saving and retirement planning.
When I expressed an interest in paddle boarding, I went to the sports store and asked some questions. The sales guy gave me lots of good information about the board, paddle and life jacket. I could have easily spent $1500 on equipment that I really didn't know how to use. Fortunately, he wisely recommended that I take a class before buying all the gear.
The instruction was invaluable. I spent ninety minutes on the river with someone who knew what he was doing. He taught me paddling basics, described the variety of gear, and coached me through the current and wind. I faltered a few times, but never fell off the board and I didn't get wet. So for $60, I learned that I could do it, and that I needed to learn a lot more. I also found out that I could spend a lot less on equipment than I had originally thought, probably saving myself about $700.
Professional financial help, even for the do-it-yourself-er or the validator, is an asset. Having someone coach you through a savings or spending plan can ultimately save you money down the line in better asset management, lower investment fees, and general coaching to keep you above board.
Health and wealth generally work hand-in-hand, so as you embark on a quest to achieve one goal, you almost always strive for the other. Speaking from experience, it will be challenging in the beginning and take a lot of determination and perseverance. But starting is half the battle! If you implement the simple steps mentioned above, before you know it, you’ll be on your way to building positive habits that will pay dividends in both your physical and fiscal well-being for years to come.
Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.