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5 Ways to Stay Financially Fit in 2014

Jan. 8, 2014
Managing Money
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Gyms are crowded with New Year’s resolutionists boot-camping, spinning and CrossFitting their way to good health. At least for a few weeks, right? It’s as hard to stick to a new fitness plan as it is to a new financial plan, but here are five ways to trim your debt and strengthen that budget so that you can get—and stay—financially fit in 2014.

Lose that extra holiday weight

Does this debt make my budget look big? Chances are you’ve put on a few pounds of debt over the holidays. And you may have already been in the hole with credit card balances and student loans. There are just about as many strategies on how to reduce debt as there are diet plans to reduce weight. There’s the “snowball” plan of paying off the smallest debt first. And there’s the “avalanche” strategy—tackling the highest-interest-rate credit card from the start. Somebody probably has a debt-reduction plan called the “ski lift,” who knows? Different methods work for different people.

The key is to pick a debt diet plan and stick to it. First, you’ll have to come up with a bit of extra money each month to begin applying to those bills. That means tightening the belt on other expenditures…

Resist the urge to splurge

Eat less, exercise more: that’s the weight-loss mantra. In money matters, it’s spend less, save more. Things really are that simple, but human nature makes it harder than it has to be.

Your chances of success will increase if you are aware of “empty calories.” In financial fitness terms that means shopping smarter, using money-saving hacks, lowering your credit card interest rate, maximizing points and resisting impulse buys and binge-spending.

Saving is easier when it’s done automatically. Consider drafting even a small amount from your paycheck to a savings or investment account each payday. Kick up the contribution when you can.

Monitor your progress

This is the weekly weigh-in, but we’re not measuring pounds or your body mass index. Instead, we’re counting dollars and your personal net worth. Depending on your nerd factor, budgeting can be simple or scientific, ranging from easy-to-use smartphone apps like Mint, Manilla or Billguard to a full-fledged personal finance software system such as Quicken.

Being in good physical shape doesn’t demand you use hospital-grade diagnostics and monitoring for your daily workout. Similarly, your financial fitness doesn’t require CPA-grade accounting standards.

Track your spending and saving habits in the manner that best fits the time and attention you are willing to devote. Whether it’s a simple system where you allocate your monthly outlays to a cash envelope dedicated for each expense or a sophisticated cash flow analysis, make sure you’re willing to keep it up to date and adhere to your budget.

Rely on a good trainer

A good personal trainer can help make your exercise plan more efficient, and even safer. Likewise, a financial consultant can assist you in investing effectively and keep you from falling into unwanted tax traps. Seek out a Certified Financial Planner™ or a CPA for trusted advice.

It’s a marathon, not a sprint

Everyone knows that “lose weight fast” come-ons are as phony as “get rich quick” schemes. It’s going to take time to reach your health and wealth goals. Teaming up with friends can help you through a good fitness training program as well as a financial makeover. And you don’t have to share every personal detail, whether it’s pounds to lose or debt to reduce.

Friends can help each other by meeting at the gym for workouts and then sharing a healthy lunch. From a financial standpoint, you can get together to walk instead of shop and move bragging rights from new Jimmy Choos to lower interest due.

Either way, fitness begins with taking the first step.

Fitness plan image courtesy of Wikimedia Commons.