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simple money tips for financial success

Best Practices of Health and Wealth

In this article I’m going to discuss three best practices of maintaining a healthy weight, and I’m going to compare them to three best practices of managing money well (maintaining a healthy wallet).

If you have tried to get in good physical shape before, you may have noticed that there are some common practices among those who are able to maintain a healthy weight. We’ll talk about some of those in just a minute. You may also have noticed that there are common habits of those who are generally able to manage their money well, and we’re also going to discuss a few of those. Perhaps not surprisingly, there are similarities between the habits of those who manage their weight well and those who manage their money well.

 

Three Best Practices of Maintaining Physical Health

Those who are able to maintain a healthy weight over an extended period of time are intentional about their eating and exercise habits. In the book Influencer (I believe it was that book; it’s been several years ago now since I read it, so correct me if you know what book the information is really from! I Googled it but couldn’t find the answer)in a brief little insight that doesn’t really have anything to do with the overall premise of the book but that was impactful to me when I read it, notes three things that are best practices of those who maintain a healthy weight long term:

  • They track what they eat (such as keeping a food journal).
  • They have a piece of exercise equipment in their home.
  • They weigh themselves daily.

According to the authors, these three things, more than anything else, had the power long term to help people maintain a healthy weight. Now, I really wish that this information were common knowledge. I think it would benefit a lot of people who want to get better control of their health, but just don’t know where to start or what to focus most of their energy on. But there they are—simple and clear. So let’s look at each of those in a little more detail, and then we will draw comparisons with similar habits for long-term financial health.

1. They track what they eat. People who are able to maintain a healthy weight over time regularly track what they eat. A common way to do this is through a food journal, where they write down each day everything that they consume. For this to be most beneficial, it’s important to also include the number of calories for each item. You can look up the estimated caloric value of different foods online on various websites. And with online tools like MyFitnessPal and CalorieKing, this is a lot easier than it used to be because you can also plug in the foods you eat and it will give you an estimated caloric quantity and keep a running total for you of your total calories eaten for the day.

2. They have a piece of in-home exercise equipment. The reason that this is so important for good health is that it provides easy access to being able to exercise regularly. If it’s cold (or worse yet, snowy) outside, your motivation to leave the house can wane. You have to warm up the car. You might even have to scrape windows with frost. That is going to make staying in your nice, warm bed for an extra hour much more enticing and make going to the gym more difficult. For you to be willing to do something long term that takes consistent effort like regular daily exercise does, it’s important to have as few barriers between you and success as possible.

3. They weigh themselves daily. Those who are serious about maintaining a healthy weight also weigh themselves regularly, often every single day. That way, if they see that they overate over Thanksgiving weekend or over the Christmas and New Year holidays and gained a few pounds, they can make a quick course correction. They don’t wait till they’ve gained 30 pounds and none of their clothes fit to make changes. (No judgment here—I’ve actually been in that situation myself, with the head buried in the sand until my jeans wouldn’t fit anymore. ☹) But by regularly weighing themselves, they stay within an acceptable weight range so that they don’t become overweight.

 

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Three Best Practices of Financial Health

When it comes to our finances, there are similarly best practices that those who want to build wealth over time generally follow. There are undoubtedly more than these, but we are going to talk about just a few of the most important. People who want to win with their money do these three things:

  • They follow a budget or spending plan.
  • They earn an adequate income.
  • They pay attention to and track their long term financial progress.

Let’s look at each of these best practices in a little more detail.

1. Those who manage their money well follow a budget or spending plan. One of the ways that those who are successful with money are able to start to save a substantial amount of money and to invest to build wealth over time is that they plan how they will spend and save their money. They make sure that they are investing an adequate amount to fund a comfortable retirement.

They make sure they have saved an adequate amount for unexpected (but not completely unanticipated) expenses in a good-sized emergency fund. They save for large purchases so that they do not have undue amounts of consumer debt (and many of them get out of debt completely as their income increases, to help them build wealth).
Learn how to create a budget and how to stick to a budget to help you reach your financial goals. And find ideas for how to reduce your spending here.

2. They earn an adequate income. For most people, their most powerful wealth-building tool—or piece of equipment if we want to keep to our comparison—as Dave Ramsey notes, is their income. You definitely don’t have to have a huge income to build wealth over time, but it is easier to build wealth if you have a good income, and it’s easier still if you have a really great income. But you have to be willing to save a good portion of that income, of course. You should be saving at least 10 (and preferably 15) percent of your income for retirement.

For example, those who follow the FIRE (Financial Independence, Retire Early) philosophy generally have good incomes (often two full-time incomes) and they then save 30, 40, or 50 percent or more of that income so that they can retire in their 30s or early 40s. I think it’s a fascinating way to live, and I hope it might be one that might even motivate you to save a little more and possibly even retire a little earlier than you had planned!

To use that income tool as effectively as possible, automate your finances as much as you can. This takes willpower largely out of the picture and makes it easier for you to get where you want to go without a constant tug between different desires and priorities. Automate your finances by:

  • Setting up direct deposit from your employer to automatically receive money into your checking account and retirement accounts.
  • Transferring money automatically from your checking account into an emergency fund and other savings accounts for things like large purchases and expenses (vehicles, home down payment, furniture and appliances, car repairs, and so forth).
  • Having money taken directly out of your paycheck to go to an employee-sponsored Roth 401(k).
  • Transferring money from your checking account to your Roth IRA and other long-term investment accounts.
  • Transferring money to automatically pay your bills (through bill pay or automatic deductions).

Find ideas for how to increase your income here.

 They track their long-term financial progress. Those who want to maintain their financial health also track the value of their assets over time. You can definitely do this by monitoring your individual bank and investment accounts (and you should regularly review them to make sure everything is in order), but another great way to track your financial progress is to use a free online tool such as Mint or Personal Capital.

We used Mint for years, and they have a great tool to monitor you combined bank and even credit card accounts. Now we use Personal Capital, which is an even more helpful tool, in my opinion, because it also tracks your investment accounts such as your 401(k) or IRAs and nonretirement investment accounts. (Mint has since added that functionality, as well, but it doesn’t work as well in this area as Personal Capital does.) Especially if you have begun investing for retirement, Personal Capital is a great tool. You can sign up for a free account here.

 

Conclusion

If you want to maintain good physical health and a healthy weight, you have to be intentional and work at it. It’s not just going to happen automatically if you don’t exercise and watch what you eat. Over the years, you will put on unwanted pounds.

And the same is true for your money. You have to be very intentional with your money if you want to build financial stability and eventually attain financial freedom and wealth. It won’t just happen by chance. But you can do some things that will make it easier for you to succeed, and following the three points noted above will help you find success. Follow a budget, seek to regularly increase your income, and track your financial progress to help keep you motivated and on track.

 

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

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