Summer is here and now is the perfect time to evaluate progress on those resolutions that kicked off the New Year. Just as we make fitness commitments and resolutions – often with summer as a target goal – getting financial fitness goals into shape is also an important and timely exercise!
First, focus on your larger financial muscle groups. In other words, look at where you spend the most money as that is where your changes can have the biggest impact. For many families, the three largest monthly expenses are housing, childcare, and food. (In fact, these may comprise 80% of your entire spending plan!) If you’re trying to save money, I always recommend that you seek ways to reduce your spending without making big changes in your lifestyle. Reducing your housing costs is a great example of this, and mortgage rates continue to be near historical lows, so if you have not (or have not been able to) refinance, be sure to take another look at any options that may be available to you.
Next, it’s time for some interval training. Getting your finances in order can feel overwhelming, so break goals and tasks down into manageable pieces and dedicate an hour each week to getting on track. For example, if you want to transition to an online money management tool, it’s easy to procrastinate gathering all of your statements and bills together. Instead, just take what arrives in the mail each week and set those items up in a new account. Put in just a little time each week, and in just over a month, you’ll be fully up and running.
Next, remember to take regular breaks to recuperate and recharge. Taking control of your finances is like exercise, and sometimes we all need to take a day off from the gym. You need to give yourself a break in order to stay focused and feel ready for the next steps. Schedule rewards for steps taken and goals reached – a dinner out or a local day trip that doesn’t break the budget. Create incentive to stay on track, and your finances will be in much better shape by summer, fall or whatever your timeframe is!
Some financial areas – like education and retirement planning – require more exertion and can be easy to avoid because of that. That’s why you really need to give these your best effort and take care of them before you run out of energy. If you start by funding these goals first with automatic paycheck deductions or bank account transfers, you’ll have the harder exercise out of the way when you have the most energy. Decide what your targets are and make savings the foundation of your financial fitness routine.
Finally, work with a professional to help you achieve your goals by hiring a personal (financial) trainer! Just like a fitness trainer, a financial planner can design the right program for you, make sure you are taking the right steps, and help you achieve your goals.