Financial health check: How to get started on being financially fit | Women's Agenda

Financial health check: How to get started on being financially fit

A couple of years ago I ran my first long distance race. Granted it was a girls-only 10km night fun run but it was the first step in my plan to becoming physically fit.

Before I entered the race, my exercise regime was almost non-existent because I am incredibly busy (like most people) and so I kept putting it off. The problem is, my health was suffering and my clothes were becoming tighter. Two very good reasons to start exercising. The race became my excuse to exercise because I couldn’t face either not finishing it or running too far behind a half-marathon-running colleague who I’d also convinced to enter.

I think you need to have the same sort of end-goal motivation to become financially fit. What do I mean by that? Well, financially fit might mean different things to different people but essentially it should mean you can pay your credit cards in full each month, you have savings in the bank for at least a month worth of expenses, you are contributing extra to super, you have an investment plan and are starting to build wealth through assets.

The problem with most of our finances though is the same problem that happens to our waistlines.  They’re simply not what they should be and we’re not really sure where to start in order to get back on track. If we run our own business, often our personal finances are the things that we neglect because we rely on the business as our nest egg. But if we’re talking to our clients about making sure they look after their financial fitness shouldn’t we be doing the same thing for ourselves?

So how do you start becoming financially fit?

  1. Set a goal. It wasn’t until I nominated a race that I was committed to my exercise plan. The same goes for your finances. Whether it is saving for retirement, paying off your credit cards, contributing to super, a deposit for your first house or starting to invest – it’s much easier to work towards something if you know what you are working towards and the time limit you have set yourself to get there
  2. Make a plan. Once you’ve set a goal you need to work out how you are going to get there. With my race, I needed to work out how many times a week I was going to train and the type of training I was going to do. It’s the same for your finances. Work out how much you need to reach your goal, where it is going to come from and how much you need to put aside each week.
  3. Be prepared to sacrifice. Did I enjoy blisters, cramps and running some nights when I would really prefer to sit in front of the TV? No! Becoming financially fit might mean you need to bring your lunch in to work a few times a week, see one less movie a month, go to the park instead of the gym or cut down on your shoe purchases. Or perhaps it’s working out your business goals, your personal goals and making sure they align and you’re on track for both parts of your life to be ship shape. Work out what you can do without, prioritise the rest and keep your eye on the goal you set yourself.
  4. Be prepared for setbacks. Eight days before my race I ended up with large blisters on the bottom of my feet which meant I couldn’t run so I had to work out other ways to move my body and keep motivated. You may find that you have car repairs or you might fall into temptation when you go window shopping. Don’t throw in the towel, just work out what you need to do in order to meet your goals still and keep going.
  5. Celebrate. If your goal was to pay off your credit cards maybe don’t celebrate with a shopping spree but make sure you acknowledge that you achieved your goal.
  6. Start the process again. Once I completed my 10km run I immediately looked for the next challenge, which will be a half-marathon in the next 12 months. Once you’ve achieved your first goal in becoming financially fit, pat yourself on the back and then set your next goal.

Now, what I didn’t mention is that after I completed my 10km race my exercise regime completely dried up. I’m talking zilch, zero, nada, done for almost three months. Between the death of a family member, pneumonia and trying to keep working in my business through it all the one thing that completely stopped was exercise. At that moment it would be such an easy decision to abandon my fitness goals and find something else to do instead. However, rather than be defeated that all my training had been lost and deciding to sit on the couch and eat chips, I worked out a plan that began with a gentle run and over 10 weeks I built back up to the 10kms.

The same is true for your finances. The one guarantee in life is that there will be surprises and your finances are no exception. The trick after you’ve had an unintended spending binge, a major client has left, your car has broken down and needed expensive repairs or you’ve paid out thousands in medical bills is to dust yourself off, take a deep breath and start again. It’s the starting again that’s the important bit. Kind of like my decision not to sit on the couch and eat chips and start moving again.

Now I know you know all this. After all it’s what you’re probably talking to your clients about every day right? But it’s like a mechanic and their cars – the mechanic’s car is always the one least looked after because they’re looking after everyone else. It’s the same for your industry.  Make sure that you’re not talking to your clients about looking after their finances, making sure they’re in the right structures, that they’re making the most of their tax situation and ensuring they have appropriate insurance and then not doing it yourself. Make sure that as a financial coach, you’re coming from a place of being financially fit yourself.

Of course, I think what’s missing from all of this is the reward. My reward to become physically fit will be more energy, less stress and being able to keep what is in my wardrobe for years to come. Oh and a daily chocolate hit. Your reward to become financially fit will be financial independence, security, stability, options and a comfortable retirement. Now I don’t know about you but I think both of those goals and the rewards (financial and physical) are worth striving for.

Stay Smart! Get Savvy!

Stay Smart! Get Savvy!

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