As you may have figured out by now, managing money is like running a marathon. You wouldn’t expect to throw on your tennis shoes, head out the door and be able to run a 26.2 mile marathon so you shouldn’t expect to become financially fit overnight either. It takes training.
Here are a few tips to get you started.
#1: Avoid Overindulging
Overindulging on food and spending can feel great in the moment, but in the long run, neither will help you reach your goals.
Just like it’s difficult to see lasting physical results unless you combine a fitness plan and healthy diet, you may not see financial results without adjusting your spending and savings habits.
The first step is to establish a foundation. Just as “calories in, calories out”—the idea that you must consume fewer calories than you burn in order to lose weight—is the cornerstone of any effective diet, consider making “money in, money out” your financial mantra. When you take home more money than you spend in a month, your savings account has a chance to grow.
Start by looking at your current spending trends. Download your expenses for the past two months from online banking into a spreadsheet and then label each expense with a category (groceries, utilities, entertainment, eating out, Christmas, birthdays, cell phones, etc.). Once you’ve categorized each expense, sort the worksheet by the category column and then add up the expenses for each category. Are you surprised by how much you spent on eating out, going to the gym, buying groceries, or on entertainment?
Doing this every few months will help you keep tabs on how and why you’re spending.
#2: Set Realistic Financial Goals
In the same way that you can’t expect to see significant results after just working out and eating right for a couple weeks, it’s also not realistic to expect results if you only save money for a short time before returning to your old habits. Getting financially fit takes discipline—and it’s not always easy.
It’s called a budget. You may not want a budget, but to really direct your money to grow, you need to set up a budget and follow the “money in, money out” financial mantra. If you take more money in than you are putting out, then your savings is bound to grow.
Be realistic when you’re setting up a budget. For instance, if you know that you’re a person that likes to eat out several times a week and it’s something that you’re not willing to negotiate on, make sure that you allocate money for eating out in your budget. Just know that by doing so it may take you longer to achieve some of your long-term goals like paying off your mortgage, getting out of credit card debt, or losing that stubborn belly fat.
#3: Automate What’s Important
I’m not sure where I’ve heard this before, but someone smarter than I once said “you automate what’s important to you.” We live in a digital world and live and die by reoccurring calendar entries that remind us to do everything from brushing our teeth (that’s an actual reoccurring daily reminder for one of my kids) to reminders for birthdays, doctors’ appointments, and more. Several of my reoccurring monthly bills are set up in BillPay in online banking to be automatically paid on the same day each month. Automating those payments has a been a total game changer for me. Now I don’t miss making my car or house payments (this happened more times than I’d like to admit when I was younger), which in turn has positively impacted my credit score.
Automating basic tasks like paying reoccurring bills or transferring money from your checking account into your savings account are great ways to invest in your future. Have you heard of our RollUp Savings account? That’s another automated tool to easily build up your savings.
Like I said before, managing your money is a marathon, not a sprint. If you’re looking for more ways to get financially fit stop by any of our branch locations to learn about our financial counseling program. Or check out our free, online Learning Center for additional financial resources.
Until the next time,