Summer has arrived! As the weather heats up, we’re all keen to get fit and healthy, ready to hit the beach and pull on light summer dresses. We spend a lot of time, money and effort on our physical fitness, through exercise programs and personal trainers, trying to look and feel good now and invest in a healthier future. We all know the benefits or making good lifestyle choices. Our financial fitness, though, is often neglected, despite its importance for achieving our lifestyle aspirations.
Start an exercise program for your finances
Being Financially Fit is about more than just putting food on the table or a roof over your head. Financial Fitness is all about having enough money to live comfortably now, without having to work for the basic necessities later on. And we’d certainly all like that!
Most of us are aware of the right path for physical fitness. Maybe it’s time to check if your finances are heading in the same direction. Consider what you are spending your money on; are they things which are important to you? How much should you have in an emergency fund, just in case? What would happen if you were to lose your job tomorrow? Will you have enough money in retirement?
If you’d like to be able to answer these questions confidently, it’s time to start your Financially Fit journey! Savvy wealth planning today will enable you to reap the benefits immediately, and into the future. A great first step to building wealth is understanding what those future benefits and long-term goals actually look like.
You don’t have to be rich to save money. Many of us don’t save or make voluntary contributions to our super throughout our working lives. It may seem like you just don’t have the money to spare. But when you start saving, you can make the most of every dollar you have, and learn to live on the money that’s available. Try saving just a little each week or month—you’ll be surprised and delighted at the results.
No matter what stage of life you are at, it’s never too late to get Financially Fit. Whether it be the start of your career, planning a family or close to retirement; you might be employed full-time, part-time or casually, own your own business or be a contractor. There are strategies for every life event.
Once you’ve decided on your long-term goals, the best way to start strengthening your savings is by weighing up your spending habits. Have you ever made a purchase you’ve regretted? Was it an emotional purchase? Most of us are guilty of buying something to boost our mood or because we were caught up ‘in the moment’. Buying behaviour is often driven by emotions, and it’s a well-documented fact that we shop more when emotions are running high.
But making money decisions based on how you’re feeling at any given moment is a financially dangerous way to live. The goal is not to stop buying nice things or having the occasional splurge. If we didn’t treat ourselves every now and then with something we like or desperately want, it would be very hard to get up and go to work every day! The key is to become more conscious of your shopping habits, and buy things for the right reasons. You’ll enjoy your purchases more without the dread and guilt of having over-spent.
Your health spending guide
While completely eliminating emotional spending might be a tad unrealistic, there are six steps you can take to decrease the damage your feelings can do to your wallet
1. Avoid making impulse purchase
If you want to buy something you didn’t plan on, wait at least 24 hours before making a decision.
2. Be accountable to yourself
Let others know you are trying to spend less. Having dinner at a friend’s house will be kinder on the hip pocket than dinner at a restaurant, and it will help your friends get Financially Fit as well.
3. Carry only the cash you need
If you’ve given yourself a $100 budget for clothing, only take $100 cash to the shops with you. Leave the credit cards at home so you’re not tempted to overspend.
4. See the big picture
Visualise why you’re taking control. Print off your saving goal–maybe it’s a new car or a house deposit—and put it somewhere you’ll see it regularly like the fridge door or bathroom mirror.
5. Take small steps
Just like lifestyle changes for your physical health, making a dramatic change is hard. Making small, realistic changes can last a lifetime.
6. Treat yourself
Make sure you set aside some money to have some fun! Let yourself buy something you really want every now and then. The occasional emotional purchase makes all the hard work worthwhile.
With your spending under control, you will be in a better postion to crunch the coins and stretch every dollar.
If you’re looking for more Financially Fit exercise, sign up for Crowe Horwath’s financial book camp enewsletter series here.
Words by Gemma Easton
Image supplied by Crowe Horwath