How Financial Fitness is Like Physical Fitness

Written by Preet Banerjee

Friday, December 6th, 2019

It's often said that if you want to achieve things that you've never achieved before, you have to do things you've never done before. That applies both to physical fitness and financial fitness. But in many ways, financial fitness can be easier to achieve in the long run after you get started.

Setting Goals

One of the most important parts of working towards goals is to define them. A common strategy for setting goals is to use the SMART system.

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Timely

For example, you could choose to train to be able to run a 5K race in six months' time. Or perhaps you want to save up for a down payment on a home. In either case, once you have a goal, you can create an action plan to get you there.

Food Journals and Spending Journals

The basic idea of healthy eating involves figuring out your goals and then creating a food budget. If you want to bulk up, you have to consume more calories than you expend. To trim down, you need to do the opposite. In either case, people tend to find better success by using food journals to track what they're eating. When you consciously note what goes into your body, you tend to be surprised just how far off the mark you thought your caloric intake is.

The same powerful insights can be unlocked with a spending journal. By actually taking note of where every dollar goes, not only are you more connected with your money, you will also see your spending behaviour change. The first time I calculated how much I was spending at coffee shops I was so shocked that I was motivated to cut back my spending without exerting much effort.

If you want to build your money physique, you need to consume fewer dollars than you earn. That's your foundation for everything else in the building phase.

How Financial Goals Can Be Easier to Train For

Physical fitness goals often require a lot of ongoing effort. You sign up for a gym membership, but then you still have to go and sweat it out to see progress.

Financial fitness goals can often be easier after you get started. If you have a savings goal, the hardest part might be finding the time to set up an automatic, regular transfer into a new savings account. But once you do that, you're done. It's like your financial muscles can get bigger without much work after setting things up. You can adapt quite easily to an automatic savings plan.

No Pain, No Gain

While there are many situations where automation of your finances (setting up automatic savings plans, or automatic bill payments, etc.) can make managing your finances a breeze, you can also improve your progress by exerting a little effort.

The more sacrifices you're willing to make in the short term, the brighter your long-term future gets. That might mean choosing a higher savings rate than you initially thought was possible, or sacrificing spending so that you can get the proper insurance in place.

There Are Blueprints, But Not Everyone Sticks to Them

With both money and fitness, there is no shortage of guides and rules to follow. But in the end, it's you who has to choose to follow those plans and stick to them.

While financial fitness behaviours can be easier to stick to in the long term thanks to the power of automation, you still have to take ownership of what your personal goals are. Now go pound out some savings reps!

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