Are You Financially Fit? Answer These Questions to Find Out

Stacie Carrabine, AIF®, Investment & Research Manager, Plancorp

Until recently I couldn’t have told you how many steps I walked, how many calories I burned, or my current heart rate on any given day.  Now, I have a clever little device to tell me all of this at the push of a button… and I love it!

What I like most about my fitness tracker is that it brings awareness to what I’m already doing, providing information that I can easily view and act on. My fitness tracker helps me set goals and make daily progress. I don’t wear mine just because it’s trendy, I wear it because when I do I make even healthier choices.

We often hear how the choices we make today can impact our future health, and the same is true for our finances.

Working with clients day in and day out on financial plans leads me to wonder, “How many of us are aware of our financial fitness?”  We spend and make money almost every day of our lives. Yet most people have no clue how to measure the results of their financial decisions.

It can be a daunting task when you don’t know where to start. To simplify, just think of the questions you would ask your financial fitness tracker. Here are a few questions we would start with:

“Am I sticking to my budget?”

The very first visual that scrolls across most fitness trackers is the number of steps you’ve taken that day. You know your goal for the day and how many steps you still have to complete to reach your target. Steps provide a clear short-term target for fitness, a simple number to start from. Your budget can do the same for your finances.

Once you’ve taken the steps to complete a budget, you can hold yourself accountable for what you are actually spending.  Do a regular check-in, at least monthly, to compare your actual spending vs. the goals outlined in your budget. Get in the habit of checking your financial health.

Regular check-ins allow to celebrate progress, and to to identify areas of spending where you need to pay more attention.  Being aware of spending habits is the first step; the more often you check in the more satisfied you’ll be with your progress.

“What goals have I set for myself?”

As you know, step count and active minutes are tied to a major fitness goal: how many calories you burn each day. Once you’ve started tracking your budget, you can see its effect on your financial goals. Answering the question, “Am I on track to meet them?” becomes much easier.

Take some time to think about your future goals and what resources you need to achieve them. One common goal I see is financial independence. For some, this means a leisurely retirement; for others, financial freedom buys more time to do charitable work. 

The good thing about long-term goals is that you can start small: putting away what you can today and making an active effort to increase the amount you save each year. Keeping your goals front and center creates greater motivation to reach them, so when you earn a bonus or raise from a job well done, you’ll be more likely to increase your rate of saving towards your goals. Building this habit as your career progresses will only increase your success rate.

In all honesty, I don't love exercising or budgeting in the moment. But I do love the results these habits produce. When I take more steps, I burn more calories. When I diligently budget, I have more money to funnel toward the things I really care about.

“How do I feel about the investments related to my goals?”

After completing a workout I can analyze my heart rate over that time.  The trend varies each time as my heart rate goes up and down during my workout. And, frankly, that’s what I expect to see.

Similarly, when investing for in the market, you should expect movements in your investment values. But over the long term, a diversified portfolio has produced positive trends and good investment outcomes. Take the pulse on your investments. Do you feel comfortable with your goals through the ups and downs that occur in the financial markets?

Many goals depend on your unique situation and stage of life. Be sure to reevaluate your risk tolerance as changes happen to your family, your income, or your goals. While the markets are not within your control, a disciplined strategy of staying in the markets and rebalancing will keep you on track.

Staying financially aware is an easy step to keeping tabs on your financial fitness. Just picture scrolling through these items on your wrist regularly to get in the habit of checking in.  Make sure you’re on track and following your budget, think about you and what goals you want to achieve, and keep tabs on how you’re investing for each goal.

Nothing is more satisfying than completing all my goals and feeling my fitness tracker buzz at the end of the day. Imagine the satisfaction you’ll get from successfully reaching your financial goals!


A version of this post originally appeared at Plancorp.com