Using Fitness Techniques for Your Financial Well Being

By John Barton, Director MGD Wealth

Improving our physical, mental and emotional health has a wide range of explicit benefits – we tend to feel better about ourselves, we are fitter, we sleep better and we give ourselves a better chance of living a long, active, enjoyable and healthy life. We can all see clearly defined motivating factors behind setting ourselves health-related goals (such as losing weight, eating better, being more active or, in my case, conquering 1,000 km in seven days on the bike). These goals can make it easier to internally justify the importance of following a personal health management plan that will help us get there (such as going to the gym regularly, eating a healthier, more balanced diet or following a set training regime).

Things, however, get a little bit more ambiguous when it comes to ‘fitness’ in other aspects of our lives. It can be harder to identify whether or not we need to make changes to our current behaviours, attitudes and strategies and the steps required in order to reach other goals can be much less apparent. Take your financial health for example; knowing where you are at is a little bit harder to visualise when you can’t just hop on a scale and the path towards achieving your financial goals can at times be unclear and uncertain. However, by changing your perspective and adopting a few key techniques from your personal health management to your personal wealth management, you may come to realise that the two practises aren’t so dissimilar. It might just be that the way you look at and work on your personal fitness (health) can positively inform the way you look at and work on your financial fitness (wealth).

On your goals

By setting yourself health-related goals - eating better, being more active, reducing stress or hitting 10,000 steps a day – you are able to develop a strategy to move towards your goals and to track your progress along the way. The same should go for your financial life. Determine what you want to achieve for the short, medium and long-term, such as growing your wealth, purchasing an investment property, funding your kids’ education, paying off your home loan and so on. The hurdle with this step is often refining and prioritising these goals because the truth is we can’t have everything we want. What do you really want? explores the concept of goal-setting in more detail.

On your spending habits

When it comes to improving your physical health, one key step is to eat better. Likewise, when it comes to improving your financial health, one key step is to develop healthier spending habits. Spending less and prioritising the things that are most important to you and actively thinking about the value of each dollar you spend, while still allowing yourself the flexibility to enjoy life and to pursue your passions! Doing this in a realistic, sustainable manner is more likely to lead to ongoing success, just like eating healthier generally is better than jumping on a fad diet and burning out after two weeks.

On your savings habits

Improving your eating habits is one thing, but as you’re probably aware, doing this is only half the job towards effective health management. Exercise is the other side of this coin, and exercising in some capacity in conjunction with eating well is the key to improving your physical health, and in many ways, your mental and emotional health too. If you do one without the other you are unlikely to reach your health goals. Financially speaking, the other side of developing better spending habits is to make sure you are saving regularly. As you get into the habit of saving regularly, you’ll find it will become second nature and you will be able to face and achieve larger goals down the track. Through saving regularly and consistently, you will have fewer worries later in life and more time and headspace to focus on what is most important to you. Clearly the amount you should save will vary from person to person depending on age, short-term and long-term goals, your spending obligations and income, but most of us would agree that we could be spending more wisely and saving more consistently.

On risk-taking

An important and obvious step to good personal health management is to avoid taking crazy risks such as exposing yourself to a dangerous situation or overindulging in alcohol consumption. Likewise on the wealth front, risking all your savings on the hottest new investment trend is not the best personal wealth management practise (Nant Whisky anyone?). In saying that, when it comes to investing, you can’t really expect a return without taking a risk and so the key here is to strike a balance between risk and return and understanding which risks you’re willing and able to accept.

On professional opinions

Just as you would book a check-up with a health professional from time-to-time to ensure your health is on track and to help you deal with any unforeseen roadblocks, there is value in consulting an appropriate professional adviser from time-to-time to ensure you are on track and to help guide you through the complexity of changing regulations, life-stages and investment markets. Not only would they have the skills and knowledge to help, but they can take a more dispassionate perspective on your affairs and can help build out a strategy suited to your circumstances.

Of course, when it comes to the fundamentals of health and wealth, the core principles are pretty simple; yet, there are multi-billion dollar industries in both spheres selling snake-oil, quick fixes and unnecessary complexity. So the key here is to do your research and be aware and smart about your choices to avoid falling into these traps.

On tracking your progress 

Keeping an eye on your progress and results when it comes to health and fitness is an important practise to help you track and improve your health and wellbeing and keep you on the right path to meeting your goals. It also keeps you accountable and provides you with the motivation to keep on going, particularly when the results are positive. There are various ways to do this from old-school paper-based tracking to digital tracking via apps or fitbits. This is an equally important practise on the wealth front. Monitoring the progress of the changes you have made allows you to gauge whether or not adjustments need to be made to your financial strategy. Similarly, tracking and monitoring your progress will help keep you accountable and when you start seeing positive results, you will be more motivated to continue going. There are various online tools that can help with this. We have access to one particular tool that can help simplify the way you keep track of all your accounts by consolidating everything into one user-friendly interface. Get in touch if you’d like to learn more.

Getting your health and wellbeing on track can at times seem to be difficult (I don’t hear anyone complaining about having too much spare time to tackle this important task). But with a goal in mind and the right strategy in place, it is doable.

The same goes for your finances. Knowing where to start can be a particularly troublesome task but by keeping it simple and applying familiar techniques that are analogous with other aspects of your life, you are making a good first step towards improving your overall financial health.

John Barton is CEO and Director of MGD Wealth based in Brisbane where he leads the MGD team with an absolute focus on values, quality, team work and corporate citizenship. For more information, visit www.mgdwealth.com.au.

Disclaimer: This article contains general information only and is not intended to constitute financial product advice. Any information provided or conclusions made, whether express or implied, do not take into account the investment objectives, financial situation and particular needs of an investor. It should not be relied upon as a substitute for professional advice.

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