12 Tips to Help You Become Financially Fit
One of the most challenging accomplishments of my life was finishing an IRONMAN triathlon. It took me 11 hours and 43 minutes to complete the 2.4-mile swim and 112-mile bike ride followed by a full marathon, 26.2 miles, at the end. Before that, there were the two years spent getting in shape for the event. It was grueling and tough, and it was also a lot of fun.
Running, cycling, and swimming give you plenty of time to think, and I was struck by how much of what I learned in my journey to become an IRONMAN could correlate to anyone striving to move ahead in their personal or business life. The parallels between physical health and financial health were striking.
When I think of financial fitness, I think of it as more than just your overall wealth but, instead, the “health of your wealth.” Is your financial health strong enough to support what you want to achieve in life? Are you working on stretch goals, or just acting like a financial “couch potato?” Just as you can improve your health, you can improve your wealth. There are no tricks to this, just some sound things that you can do to improve your financial fitness just like exercise and training improve your physical fitness.
Getting to retirement, or saving for college or a home, are all marathons rather than sprints. Here are 12 things I learned in my journey to becoming an IRONMAN that you can use to prepare for your own financial marathon.
Be in the moment. When we think about our financial health, many people focus on their regrets and things in the past. ”I regret I didn’t take action on this.” “I should have invested in that.” Or, “I’m not as financially successful as I thought I would be at this point in my life.” These thoughts are only going to lead to guilt and bad feelings. On the other side of the token, if you think about the future, sometimes people get anxious, and that anxiousness can prevent you from taking action.
Live in the present. “This is where I’m at today.” “This is why it’s important.” There is nothing you can do about the past, and you don’t know what’s going to happen in the future, so the only thing you can control is to try to take advantage of where you are today.
Be focused. You’ve got to be laser-focused at your task at hand. Whether that’s retirement planning, college planning, estate planning, or insurance planning, take it one step at a time and remain focused on what you’re trying to accomplish.
Believe. You’ve got to believe in yourself. You’ve also got to believe in the people and the financial institutions you’re working with, and it helps if those people or institutions have a good track record. You can’t predict what’s going to happen in the future, but you’ve got to believe in what you’re doing and who you’re working with.
Have a plan. If you are getting in shape physically for a big event like an IRONMAN, then you must prepare. Working backwards from the day of the event, you ask yourself, “What’s my plan for the week before the race? Four months prior? For the year leading up? What’s my plan two years ahead of the race?” Your financial life is similarly laid out over 30 or 40 years. What’s your end goal? What’s your game plan? Are you reviewing things every year, every quarter, every six months?
Have a coach. Even the best athletes have a coach, someone who can provide an expert, outside opinion on how things might be improved. When you’re looking at tackling something like retirement or business planning, it helps to have the support of a financial adviser, someone that’s already been there or worked with others in similar situations and can give objective and subjective information about what to do. It helps keep you on the path and wards you from making bad or emotional decisions.
Have a training partner. This might be your spouse or maybe your business partner, but somebody who can hold you accountable, whether that’s each day, every quarter or every year. That’s one of the big hurdles people face when it comes to their financial wealth: They don’t have the discipline to follow through in saving or investing money.
There will be setbacks. This is life, and life is tough. There may be an illness, sickness or accident. There may even be a death or disability. That’s one reason why we’re talking about both physical and financial well-being together, because they really are interconnected. There are going to be setbacks, so plan for the unexpected. Make sure you have insurance to provide the protection you and your family need and deserve. Also, stay focused on your end goal, keep to your game plan, and do the best that you can with where you’re at right now.
Let it go. If you make a bad decision, or something happens that you weren’t expecting, getting upset or mad about it isn’t going to help you. Let those things go, re-evaluate your plan with your coach if needed, and keep going.
Have fun. This is something that is important to you, and I think there is a joy that can be found in working towards your long-term goals. You can have interest, enthusiasm and enjoyment with your financial health just like you would your physical health. I think, in life, people are much happier if they simply enjoy it and have fun with what they’re doing. The journey is the destination.
Failure is not an option. When I was training for my IRONMAN, I knew I was going to make it no matter what, even if I had to crawl to the finish line. Well, failure is not an option here, either. You don’t want to take risks with your retirement plan. Once you’re retired, you’re retired. It’s important, when you look at your financial health, to use products and strategies that can help reduce risk.
Have a checklist. While training for the IRONMAN, I found it essential to have a checklist of things I needed to have or to do, and I think the same holds true with your financial health. Having a checklist ready for your annual review can be a very helpful tool. Things to include on that list are, do I have a great coach that I can lean on? Am I in contact with other professionals like accountants, attorneys, or insurance advisers? Do I have the right products and strategies in place? Have I remembered to review my progress on a regular basis?
Make it part of your regular routine. Obviously, in training for the IRONMAN, I had to have a regular program of exercise to improve my physical fitness. Going to the gym once a year wasn’t going to cut it. The same is true of financial fitness. You can’t just have an annual review with your financial adviser and think that you’ve done everything you can to improve your financial health. I think semi-annual or even quarterly check-ins are necessary. You don’t have to make drastic changes, but some minor adjustments can keep you aligned with your long-term goals. This is supplemented, of course, by regular exercises such as automatic 401(K) contributions, direct deposit of a portion of your paycheck into a savings account, or a monthly review of your budget and expenditures.
These are the 12 bullet points I came up with as I was training for the IRONMAN triathlon. Whatever your goal is in life, having the discipline to keep physically and financially fit will help you get there.