This may come as no surprise, but many of us here at Abacus enjoy a healthy fitness routine. A few weeks ago my colleague, Kari Jean shared about the lessons she learned from running in the L.A. Marathon. I, too recently had a “financial” epiphany after reading about how well the American women runners did in the Boston Marathon. They persevered through cold, driving wind and rain in a historic race. This accomplishment reminded me that I’ve fallen into a running lull.
I’m no marathoner, but I like to think I’m a decent middle-distance runner for someone now in the second half of her expected 100-year life span. Rainy weather, a nagging injury, and a busy schedule at work led to, well, hitting the trail a lot less than I’d like to. My mileage is down and so is my general well-being. I am in a rut of “I’m too tired to run and a glass of wine sounds so much nicer!” Excuses, excuses.
My solution to this problem? Set a goal (i.e., register for a race) and just get going already. I registered for a 10K trail run knowing this will present a reasonable training goal in the coming weeks. I’m going to automate running by just doing a short run each day. Unlike Des Linden, I don’t need to get fancy with a complicated training schedule. I just need to get out there and run a bit about five times a week.
Back to my epiphany, personal finances are a bit like training for a race. Sometimes we slip up and spend more money than we should. Suddenly the credit card balance is more than we can pay off on the due date. A long-term goal such as retirement can seem so remote that it is hard to keep our eyes on the prize.
But just like my running, you don’t need an overly complicated plan to get your financial training habits back on track. Here are a few simple tips to help you ease back into your healthy spending routine:
- Set your goal. Are you saving for a down payment on a home? Plugging away in a steady way towards financial independence?
- Schedule an automatic payroll transfer to your 401k (which should almost always be your first priority). If you have credit card debt or need to save for a short-term goal (e.g, hiking Machu Pichu) then also schedule 3% of your take home pay from checking to savings to take place on pay day. You’ll be amazed at how quickly you’ll build up cash and increase your nest egg.
- Acknowledge that it is okay to wobble a bit. But do observe what it is that is tripping you up and see what is realistic to change. Too many expensive nights out with friends? Plan a pot luck next time – your friends will likely thank you as well.
- Build strength and good habits. Having a healthy financial life is a bit like fitness training – regular moderate working of those muscles is way better than the occasional bursts of well-intentioned but unsustainable spurts of activity. Research shows that those who have a plan to save, actually save more for their financial goals (duh!). Go online now and do a little financial workout – schedule a savings transfer now. Beyond scheduling that first automated transfer, it is the only kind of “workout” I know of that does all the work for you with zero effort.
Let me know how your financial training schedule is going and what methods you use to reach your goals. Happy trails!