There are many parallels between physical fitness and financial fitness, with both requiring discipline, consistency, and a clear plan to achieve long-term success. Just as maintaining physical health is crucial for a fulfilling life, achieving financial fitness is essential for a secure and prosperous future.
In physical fitness, setting clear, achievable goals is the first step. Whether it’s losing weight, building muscle, or running a marathon, having a target keeps you motivated and focused. Similarly, in financial fitness, setting specific goals such as saving for retirement, buying a home, or funding your child’s education provides direction and purpose. Start by identifying your financial objectives and breaking them down into manageable milestones.
Just as a training plan is tailored to your fitness goals, a financial plan should be customised to your financial aspirations. This plan should include a budget, a savings strategy, and an investment plan. A budget helps you track your income and expenses, ensuring you live within your means. A savings strategy, like emergency cash reserves, provides a safety net for unexpected expenses, whilst an investment plan helps grow your wealth over time.
In fitness, consistency is crucial and the same applies to financial fitness. Consistently saving a portion of your income, regularly reviewing your budget, and making informed investment decisions are habits that build financial strength over time. Automating your savings and investments can help maintain this consistency.
Regularly monitoring your progress is essential in both fitness and finance. In physical fitness, you might track your weight, strength, or endurance. To maintain your financial fitness, you should regularly check in to ensure you’re on track to achieve all the things that are important to you. These ongoing check-ups help you stay on track and enable you to make the necessary adjustments to maximise the probability of achieving your “true wealth”.
Just as a personal trainer can provide expertise, motivation, and accountability in your fitness journey, a financial adviser plays a similar role in your financial journey, helping you navigate complex financial decisions and preventing you from making wealth-eroding decisions.
Setbacks are inevitable in both fitness and finance. Injuries or unexpected life events can disrupt your fitness routine. Similarly, market downturns, unexpected expenses, or changes in income can impact your financial plan. The key is resilience and patience. Staying focused on your long-term goals, and not letting your emotions drive your investment decisions, will help maximise the probability of achieving your goals. Remember, setbacks are temporary, but your commitment to your goals should be unwavering.
In fitness, reaching a milestone like completing a race or obtaining a personal best is a moment that brings a sense of achievement. In finance, achieving a savings goal, paying off debt, or reaching a financial milestone deserves recognition. Celebrating these achievements reinforces positive behaviour and can motivate you to set and achieve new goals.
Achieving financial fitness is a journey that requires dedication, discipline, and a clear plan. By applying the principles of physical fitness to your financial life, you can build a strong foundation for a secure and prosperous future.
Jason Kirk (CFP® Professional, SMSF Specialist Adviser, GradDip. App.Fin&Inv, B.Econ) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.
Any information provided to you was purely factual in nature. It has not been taken into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product such as a decision to purchase or invest in a financial product. Please contact us if you would like to obtain financial product advice.