New Year - Time for a financial tune up

Financial Fitness is just like Physical FitnessAlmost three years ago I started Weight Watchers as I had about 50 pounds of extra “baby weight” I needed to lose. Granted my “baby” was in kindergarten at this point, but at least I finally “saw the light” and committed to getting myself physically fit. Needless to say, it was not an easy process. In fact, it seemed like I would never reach my goal weight when I was only losing a pound or less a week. Despite the struggles, though, I stuck with the plan and ultimately reached my goal weight within nine months of starting the program. I then went into what they call “maintenance” time. During this period, you are allotted more points and given more freedoms as your goal is now to just maintain the weight you have reached. I lived comfortably in maintenance mode for about a year. But then life got crazy, I got sick and couldn't work out for a few weeks, then we had the holidays and before I knew it, I had gained back about eight pounds. I still thought I looked fine, so I didn’t stress, but then I recently hit the ten-pound mark and started stressing. So this brings me to today where I have just re-joined Weight Watchers in an attempt to get rid of these ten pounds and maybe another five if I can stay committed.Sometimes a tune up is in orderWhy am I sharing all of this with you? Because I see many similarities in achieving and maintaining physical fitness as I do in achieving and maintaining financial fitness. I frequently see clients hit a point where they know they have to focus on their financial fitness and they put in the hard work and get their financial house in order. However, just as I experienced with my weight, life is always full of surprises and people experience financial “surprises” as well. These surprises could include a new job, a move, a child, etc. Sometimes we do not realize that this surprise has thrown us off and made us financially unhealthy until we are in a bad place. This is why it makes sense to CONSTANTLY monitor your financial picture. Just as it will be easier for me to lose these 10-15 pounds over 50 pounds, it is easier to deal with $1,000-2,000 of extra debt than it is for $1,000’s of dollars of extra debt. So what are good things to do to give yourself a financial tune up?1) Get Your Financial Information in One PlaceThe New Year is a great time to re-focus on your financial priorities. Find a web-based program or app that makes it easy for you to monitor your assets and your debts in one place. When you have your financial information in too many places, it is difficult to assess it on an ongoing basis. I have found that when my clients have more than three logins, they don’t log into everything and they primarily just review their main bank information if they review anything at all. Think about this check in as your weigh in. You should do this at the very least weekly, but I would advise you to do it a few times a week.2) Schedule Weekly Check-InsAre you avoiding this check in because you don’t like what you see? I used to do this with the weigh in. I did not weigh myself for years because I didn’t want to see the number staring back at me. If you feel this way about your finances, then it is probably time for you to do something with them. Just like the scale, numbers don’t lie and if yours aren’t pretty, it is so much easier to deal with them now then later when it gets more difficult to manage. Put this time in your calendar and use it wisely.3) Make SAM goals for your financesI give my clients what I call "SAM" goals. These are Specific, Achievable and Measurable.

• Specific - Don't just say, "I want to save more" or "I want to spend less." Say, "I want to save $20 a week" or "I want to have five hibernating days a month."
• Achievable - I needed to lose 50 pounds, but I could not try to lose it in two weeks. This would not have been an achievable goal and would have set me up for failure. So, make sure your financial goals are achievable. The best way to do this is to start small and push yourself to work harder (i.e. start by saving $5 a week, then $6, then $7, etc.) I did not lose 50 pounds overnight, but I did over 9 months.
• Measurable - During your weekly or regular financial check ins, measure your progress to goal. If you struggled one week, can you work harder the next week to make up for it?

4) Celebrate Your SuccessAs I lost every 5 pounds, I would give myself a little reward like an extra glass of wine. The rewards helped keep me focused on my goals, and made it seem fun along the way. As you hit your financial goals, give yourself little rewards to help keep you motivated and have fun along the way. Financial fitness and financial tune ups are difficult, but important. Despite the hard work, you want to make sure that you enjoy the journey, so you will be more likely to stay on it.Do you need a financial tune up? What are you going to do to make it successful? What works for you?