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Check Your Financial Fitness (Long Version)

September 16, 2021

Check Your Financial Fitness


Self-improvement can be considered a big industry in America. More than ever, people are focused on improving the quality of their lives by committing to personal development. Personal development consists of actions taken that develop a person's potential with the ultimate goal to enhance the quality of life. Those actions could revolve around finances, relationships, or even career aspirations.

Most associate self-improvement or personal development with physical fitness goals. According to Boston Medical Center, an estimated 45 million Americans go on a diet each year, presumably, making weight loss their primary goal. As you think about improving your current circumstances, perhaps you imagine running a sub-10-minute mile, getting down to your college weight, lowering your bad cholesterol, or something else to improve your overall physical health. While these things will help you to feel better and hopefully live longer, they require the self-discipline to meet them.

Just as physical fitness can renew your vitality, increase your energy and improve your well-being, financial wellness can help invigorate your financial future. Don’t be fooled because this too can take discipline.


Think of this type of financial strategy to get your finances in shape. Your financial fitness strategy is created to ensure you have the money you need when you need it, today and in the future. It considers unforeseen major life events such as marriage, untimely death, beginning college, births, divorce, illness, or retirement.

Your financial strategy would include setting specific goals around three primary categories: saving, budgeting, and investing. For several people, getting financially fit means more than the previously mentioned categories. It also means changing the way you think or feel about money and being mindful of where your money goes to help you make wiser choices in achieving your desired financial health.

You have probably already thought of some financial goals:

   ●  I want to retire with enough money to maintain my current lifestyle.
   ●  We are saving to help my son pay for at least two years of his college education.
   ●  I am starting a business that revolves around my hobby to continue working and supplementing my income during retirement.
   ●  I want to buy a vacation home.
   ●  I want to retire debt-free.


Remember, a goal is an idea of the future or desired result that you envision, plan and commit to achieving. The Goal-setting theory (Locke & Latham, 1984) states that the simplest and most direct motivational explanation of why some people perform better than others is due to disparate performance goals, implying that setting and adjusting goals can significantly impact performance.

The process of setting goals, financial or otherwise, offers a roadmap to achieving what you want and can be very motivating. By knowing precisely what you want to achieve, you can concentrate on those specific items.

Conversely, you will also be able to identify distractions that could potentially lead you astray. If distractions occur (inevitably, they will), reevaluate your goals to determine if they are still relevant to your circumstances. If not, then perhaps it is time to alter or change the goal you originally outlined.

To reach goals, you must set particular tasks that correspond to a timeline. For example, if your goal is to eliminate all debt by the time you retire, then map out each task need to achieve that goal. This example may include making a list of each outstanding debt and identifying the current monthly payment and interest rate. From there, determine the date you want to retire and divide the number of years until retirement by debt. Certainly, we have oversimplified the steps for this example, and that approach may not be the right one for you.

Remember, goals are great, but they should be realistic and attainable. Do not set yourself up for failure by outlining goals that simply cannot be achieved. Having an accountability partner, like a Financial Professional, is a good idea too. Hosting a quarterly meeting to review results will help you stay on track.


You can start by measuring your financial fitness.

Grab a piece of paper and begin to list your expenses: Get as specific as to how much you spend on items such as groceries, utilities, housing, insurance, transportation, loan payments, credit card payments, pet care, and childcare. Be sure to list any interest rates associated with each payment.

Next, outline your income, both full or part-time: Do both you and your significant other earn an income? Consider if there are opportunities for new income sources without giving up too much of your family or personal time.

Once you have that necessary information gathered, take a few moments to answer the following questions.


1.   Are you short on money before each payday?
2.   Do you have trouble knowing where your money went?
3.   Has a recent change in your job or family status caused increased financial pressure?
4.   Are you sure that the life, health, and dental insurance that you receive from your employer will be sufficient for your family?
5.   Are you saving for your children’s education?
6.   Are you adequately saving for retirement?
7.   Can your current savings be working harder for you?
8.   Are your assets appropriately positioned to pass on to your beneficiary(s)?
9.   Do you plan adequately for taxes?
10. Have you established an emergency fund that can carry you through for at least three months?

How did you do? If you’re one of the fortunate people who have everything under control, carry on. But, if some of your answers give you concern, then it’s probably time to act.



There are many ways you can improve your financial situation. Look at the action steps outlined below that you could possibly take.


●  Pay yourself first. If you have the opportunity to contribute to an employer’s retirement plan, jump on it. Contribute as much as you can, at least the amount that the company will              match.
●  Protect your financial health. Sometimes the unfortunate occurs, and you need to be prepared. Protect your life (life insurance), your ability to earn an income (disability insurance),        as well as your home and other key assets.
●  Plan for Uncle Sam. Do you keep careful records to meet the tax deadline every year? And, are you planning for your family’s or business’s future through proper estate planning?
●  Save for college. College costs are rising faster than the overall inflation rate, so prepare now. No children? Then save for yourself even more.
●  Establish an emergency financial fund. Stuff always seems to happen. Keep three to six months of expenses in an easy-to-access accounts, such as a money market or savings.
●  Reduce spending on non-essential items. A daily trip to the coffee shop can add up to almost $1,300 per year. If you have twenty years until retirement, you could potentially save an      additional $25,000 per year.
●  Know when to splurge. Pick and choose where and how you are spending your hard-earned money. Keep the gym membership but perhaps reduce the number of times you go out         to eat in a month.
●  Go without an automobile payment. With such low-interest rates, it is tempting to purchase or lease a new vehicle every few years. Imagine if you were able to add that $500                   monthly payment to your savings account.
●  Meet with a financial professional. Discuss your specific goals and needs with a trusted financial professional who can recommend an appropriate strategy designed just for you.


Once you have a financial strategy developed, here are a few reminders to help you stay on track:

●  Stick to your budget: Having the self-discipline to stick to your budget and create good spending habits is a critical element of being financially fit. If your strategy falls off the rails,             then regroup and start anew.
●  Monitor your spending: Monitor your spending on a monthly basis and see how it aligns with your expenses. You can use a piece of paper or several tools online that will help in this         area. If your spending exceeds your income, then readjust accordingly.
●  Track your progress: Track by the milestones or goals you have established, e.g., retirement savings, college fund, investments, rainy day fund, etc. Revise your strategy if necessary       to accommodate life events.

Regardless of your goals, deciding to get started on achieving them is key to helping you become financially fit. Taking the time to outline your financial strategy and getting buy-in from others in your household that may be impacted by the changes necessary to achieve your goals is also equally important.

And, you can stay fit by reviewing your goals and action steps quarterly or at the very least annually to ensure that your financial future is secure. There are several online tools available to assist you, along with your Financial Professional.

If you are interested in learning more about getting financially fit, please feel free to contact me [insert contact info]. I look forward to answering any questions you may have.


Disclaimer: This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this post may not be appropriate for your situation. Always consult your legal or tax professionals for specific information regarding your individual situation.