Liam Croke: Shape up and get started on financial fitness plan

“Getting fit is all about mind over matter. I don’t mind, so it doesn’t matter.” - Adam Hargreaves

“Getting fit is all about mind over matter. I don’t mind, so it doesn’t matter.” - Adam Hargreaves

I joined a gym about six months ago, and I initially became a member for three months to see how I would get on, whether I would like it and more importantly whether I would use it. I didn’t want to join and pay for 12 months and discover after one month that it wasn’t for me.

Anyway, I joined and my motivation for taking this step was because I felt I needed to be doing some physical activity because I wasn’t doing anything and sport always played a major part in my life. I missed doing something and, if I’m honest, I missed feeling fit.

I was either sitting in my office all day working or driving all over the country and at the end of a long day, I would feel tired that the last thing on my mind would be going for a run or playing a game of tennis.

But I was determined to do something, so given there is a gym close to my office I decided to join and give it a go.

The reason I am referring to becoming physically fit is because over the last six months I have noticed how very similar the process of getting fit is to getting your finances in shape as well. As a financial advisor, I help people with their money and I put together plans for them that will help them earn more, save more and protect what they have – I am their personal money trainer. But when it comes to health, I am on the other side. I have learned that to be successful the same set of skills can apply to both disciplines.

The mental part for me, starting out in the gym, was the hardest. It is far too easy to come up with excuses not to go – I don’t have the time, my leg’s feel sore, I don’t see any results after all my efforts (after one visit!) and the same applies to our finances.

If you are in debt you know you want to get out of it, but are you willing to track where you spend your money each month? Are you willing to sacrifice that takeaway each week? Is trying to earn a second income too much effort?

The motivation for many people to get physically fit can be short term: they are going on holidays and want to look good at the beach, they have a wedding coming up and they want to look great at it. Or their motivation could come from an external source like their GP, who might shock them into taking action because he or she tells them that if they don’t lose weight and/or start exercising they are reducing their life expectancy by X amount of years.

I see similarities when it comes to financial matters, where people only take action when they receive a warning message like a letter from their bank threatening legal action if they don’t bring their account up to date or reporting them to the credit bureau for non-payment and so on.

But before anything like that happens it would be great if you went to your own financial gym and got a diagnosis, an assessment, whatever you want to call it from a trusted financial advisor. Let them assess your body mass index (your level of debt) your strength and endurance levels (savings and retirement accounts) your blood pressure (bank and interest rate charges) your aerobic fitness (levels of emergency funds) and from this they can put together a plan for you, just like a gym instructor would.

Spending time now on either your health or your wealth will go a long way to forestalling problems at a later date when you may not have the time to make up for what you should have done years ago. That old saying of “had I known then what I know now” won’t be applicable but exactly like any fitness programme, taking the first step can and is the hardest part.

There is no doubt: it’s going to take a lot of time and energy on your part. You will need to do things you might not like doing, like budgeting each month, filling out paperwork, reading up on your loan agreement terms etc.

But like trying to get fit or losing weight, people try to take short cuts because they believe they can achieve all of that without any effort or sacrifice. But they are wrong; they buy dieting pills, they buy books promising you will lose pounds in a matter of hours. This attitude is like another old saying that goes “a lot of people want to go to heaven but no one wants to die to get there.”

If you want to improve your finances but you are not willing to stand on the scales, so to speak, not follow a plan, not put in the hard work, the effort (avoiding expenditures/debt repayments that would damage your finances), the energy or the time, then you will fail. A financially fit person will avoid things that damage their plan; debt repayments, for example, carry the highest amount of calories you can consume so they avoid them if they can. They have a good sense of what habits are destructive to their financial plan – bank and annual management charges, overpaying of taxes, overpaying for utilities to mention just a few. Once these problem areas are identified, they do something about them.

What I have learned from going to the gym and what similarities I can use for my clients when I give them financial advice is that (a) you need to commit for the long term (b) you need to set a schedule for training (c) you need to start off slowly and gradually build up your training over time (c) you need to set targets that are attainable and measureable over time and (d) you need to record your workouts.

And my experience from going to gym is that eventually the effort was worth it. I feel lighter, I am sleeping better, I have more energy and now going to the gym is an enjoyable experience. If we apply the same principles to our personal finances I have no doubt you will see the same results, and starting really is half the battle.