Get Financially Fit – Exercise your Financial Muscles

What is financial fitness?

We are all familiar with the term “physical fitness,” and if pressed for a definition, could come up with an explanation related to levels of strength, a routine of physical activity, and the effects on overall health.  But each individual will explain this a little differently based on their personal history, their current physical fitness journey, and their goals.

The same concept applies when discussing financial fitness.  Financial fitness can mean something different to everyone, but the idea is to get ahold of your finances, develop a routine, and keep them in shape.  Below we consider six principles that will help you get fit, financially, no matter your starting point.

1.  Set Goals
A common practice among beginning hikers, is to not only set your sights on the final ascent, but also the nearest bend in your path.  This allows you to make strides toward your end goal, while simultaneously accomplishing small wins that motivate you to continue climbing.  Similarly, if you never set your short-term and long-term financial goals, it will be that much more difficult to achieve a higher level of financial health.  Create a plan for yourself — the goals you attain along the way will push you up the path toward your ultimate objective.

2.  Budget
Have you tracked your spending lately?  Do you know where your income goes, and how much of your income is being allocated toward each of the ‘buckets’ in your budget?  Tracking expenses is a great way to ensure a more complete picture of your finances.  When you dig into this, you may be surprised to learn how much you spend dining out each week, how much you spend shopping each month, or how quickly your morning coffee adds up over the course of the year.  Use a carefully reviewed and tracked budget to find areas of unnecessary spending, that could, in stead, be diverted to savings or paying off debt.  But don’t forget — too tight of a constraint on your budget will make the plan difficult to follow, so be sure to leave room for a bit of fun.

3.  Live Within Your Means
This can be a tough one as we go through cycles with the economy and inflation; but is important to consider throughout all the ups and downs.  This principle goes hand-in-hand with creating a budget that works for you, your needs, and your lifestyle.  Excessive spending is not a path that leads toward positive financial fitness.  Allow your budget to be the blueprint that helps you achieve this goal!  Isn’t it better to think, “I always have money left over at the end of the month,” rather than, “there is always ‘month’ left at the end of my money”?

4.  Invest Wisely
Your short- and long- term goals will significantly influence your investments.  For most, a long-term goal is to experience an accumulation of wealth over an extended period of time.  Considering your various goals will help you achieve a diversified portfolio, which in-turn will help reduce risk and enhance return on your investments.

5.  Enjoy Retirement
In retirement, your risk tolerance (willingness to lose money, while waiting for a bigger payout to come) typically changes, as you take the daunting leap from earning income, to relying solely on your savings.  Though many enter retirement after decades of learning how to save, and accumulating wealth — the transition is still a bit scary.  Don’t be scared!  Take the time now to create a financial plan that will allow you to enjoy your golden years.

6.  Protect your Assets.
What happens if you become disabled, or pass away unexpectedly?  Do you have health insurance, life insurance, personal liability insurance?  Have you reviewed your Will recently; do you have an estate plan?  Who are your beneficiaries?  Do you have a trusted advisor to handle your affairs; someone with whom you have had frank conversations regarding the future of your property and finances?  Protecting yourself, your family, and your assets are foundational to achieving a higher level of financial health.  Every situation is unique, which is why it often helps to work with a ‘coach’ (or trusted advisor.)  Some may find a more aggressive approach is necessary to reinforce their finances.  While others may be that their financial plan has a few small holes that need plugging up.  In that case, skip the circuit training — you could do well to focus your energy on one aspect of your finances at a time;  build strength in that area, then move onto the next.

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This blog is intended for general informational purposes, and should not be taken as strategy or advice by ATLAS Lifestyle Planning Group (ATLAS LPG).  ATLAS LPG encourages all individuals to consult their financial professional about these or other matters which concern their personal finances or financial strategy.  If you do not have a financial advisor, or feel you may benefit from seeking the advice of a different financial advisor, please do not hesitate to reach out directly to your ATLAS office, or contact us HERE.  Your ATLAS LPG Team is always ready and happy to help, whatever your needs may be!

 Investment advisory services offered through ATLAS Lifestyle Planning Group (ATLAS LPG), a Registered Investment Advisor.  ATLAS LPG will only provide investment advisory services in jurisdictions where it is registered as an investment adviser or exempt from registration.  Insurance and annuities offered through ATLAS Risk Management Group (ATLAS RMG) CA License # 0M41231.  ATLAS LPG and ATLAS RMG are separate entities and neither provides legal or tax advice.

* Some of the information found in this article may have been provided by FMG or Assetmark Inc.