fiscal fitness

Fiscal Fitness Part III — Using Lessons Learned About Physical Fitness

Fiscal fitness has more in common with physical fitness than one might think. Many financial experts draw parallels between the two by using well-known elements of diet and exercise programs to illustrate how consumers can get their finances in order. In his blog post titled Eliminate Debt with 10 Successful Diet Principles, Leo Babuta, the creator and writer of zenhabits.net says, “Debt dieting and weight dieting are exactly the same. Personally, I’m doing both, and it’s striking how similar the two practices are.”1 They both involve setting goals and having the dedication to stick with what you’ve started. Both also require you to change your habits — whether that means eating a healthier diet to stay physically fit or trimming your excess spending to reach fiscal fitness. And there’s no quick or easy way to accomplish either, especially if you want to maintain fitness.

Here are a few principles of successful physical fitness programs and how they equate to building a stronger, healthier financial situation.

 

1. Set up a training regime = Write down your goals in detail.

In fitness training, you don’t just say, “I’m going to lose 30 pounds.” You need to go into detail about the changes you will make to your diet and lifestyle. Similarly, as you’re building your fiscal fitness, you need to define exactly how you will reach your goals.

Is your goal to pay off  your credit card debt? Or to get your credit history in order so you can buy a house? Maybe you want to move beyond living from paycheck to paycheck. Whatever your goals are, it’s important to list them and come up with specific ways to achieve them. Solutions might include: “On every payday I will put $50 toward my credit card balance.” Or, “I’ll start making my coffee at home rather than spending $5 every morning at the coffee shop.”

 

2. Watch your diet = Establish a budget and keep track of your spending.

In a physical fitness program, you need to establish a routine of exercising and counting calories or watching what you eat. It can be challenging at first, but after a while it can become more of a habit. The same goes for your fiscal fitness program. Plan your spending by creating a budget. Start by listing all your monthly expenses like rent, car and/or loan payments, utilities and food. Subtract these expenses from your take-home pay and you’ll see how much you have left for extras.

Keep a record of how you spend this extra money, whether you write it down on paper or type it into a spreadsheet. Having your expenditures listed in one place makes it easier to spot areas in which you’re overspending so you can make changes to your habits.

 

3. Physical fitness helps reduce stress = Fiscal fitness helps reduce stress.

“There is a direct correlation between health and finances,” says Tracy Fors, vice president of marketing and business development at cutimes.com. “Debt causes stress, which can cause all kinds of health problems. In turn, health problems result in more expense.”2 In fact, a recent study from NerdWallet Health reported that medical bills are the #1 cause of personal bankruptcies in the United States.3 It’s easy to see the vicious cycle this can create at a time when you’re trying to clear up your financial situation.

As you begin to change your spending habits and take an active role in building fiscal fitness, chances are you’ll notice a decrease in your stress level. Give yourself credit for each step you make toward fiscal fitness. This isn’t an easy process, so give yourself a pat on the back for the effort you’re making. Discipline, commitment and patience are necessary to achieve physical fitness. They can also be the key factors that enable you to create new habits for a lifetime of fiscal fitness.

 

1http://zenhabits.net/fiscal-fitness-eliminate-debt-with-10-successful-diet-principles/

2http://www.cutimes.com/2014/01/08/promoting-fiscal-fitness

3http://www.nerdwallet.com/blog/health/2014/03/26/medical-bankruptcy/

 

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