All products are independently selected by our editors. If you buy something, we may earn an affiliate commission.
When it comes to your fitness, you may have your eyes on toned arms or buns that would make Kim Kardashian blush. But there's something else you should focus on getting in shape: your finances.
"We can all benefit from health checks in plenty of other aspects of our lives, especially our finances," says Elle Kaplan, finance expert and founder of LexION Capital. And with that in mind, here are eight ways you can get financially fit this year.
1. Take your credit cards out of your wallet. Credit cards should be saved for emergency-only situations, but when they're stashed in your wallet, they're easy to whip out and use for everything from groceries to gas. "Credit cards can quickly become the junk food of your financial diet," explains Kaplan, likening them to what you reach for in the pantry because you haven't stocked any healthier options. When you're tempted to overindulge, "credit cards' high-interest rates will rapidly eat away at any progress you’ve made and drag you into spiraling debt," she says. Remove the junk in your wallet, so to speak, by replacing credit cards with the cash you've determined you can spend for the week based on your own budget.
2. Finesse your financial know-how. Though you may rather stick a pen in your eye than read up about financial matters, "the road to financial fitness starts with getting educated," says Wendy Liebowitz, vice president of Fidelity Investments’ Fort Lauderdale Investment Center. Luckily, there are resources that make learning all about money—from how and where to invest to the nitty-gritty difference between compound and simple interest—perfectly tolerable. Fidelity has its own easy-to-digest interactive site, and there are a bevy of books written by young, cool women you might actually have difficulty putting down. We like Rich Bitch by Nicole Lapin and When She Makes More by Farnoosh Torabi. Try to read one blog post or chapter a week.
3. Don't deny yourself fun—set fun limits instead. You've surely heard this before: The secret to a healthy diet of any kind is moderation, and the same holds true for your finances. "Without moderation, people become more likely to give up, because it proves to be too difficult to resist all the goodies you’ve grown to love over the years," explains Mary Beth Storjohann, finance expert and founder of Workable Wealth. If you want to cut back on extra expenses this year—think, take-out orders or girls' nights out—don't deny yourself entirely. "The key to these things is to set a dollar limit for the expenditures for the month and when you’re out of money, you’re done," says Storjohann. "Keeping yourself within limits will allow you to strategically plan for other purchases and savings for goals."
4. Check your benefits selections. If you haven't looked at your workplace benefits since you signed on some months—or years—ago, go ahead and give them a second glance. Maybe you missed last month's memo that your company has increased its 401(k) match, and you can up your own contributions accordingly. If your work offers a health savings account, see if you can cash in on (free) money to use for upcoming medical expenses. "At the very least," encourages Liebowitz, "set a goal to find out when you are next eligible to change your benefits, and mark your calendar for a few weeks before that deadline so you know when you should do this research."
5. Create actionable goals. When you want to lose weight, you don't make a goal to get healthy—you set up a new workout routine, preplan your meals, and buddy up with a friend who'll help keep you on track. The same holds true when it comes to your money. "Just like you don’t vaguely aim to 'get healthy,' you’ll want to home in on the specifics of your money fitness." says Kaplan. "Saying you’ll 'save money,' for instance, is almost meaningless, but setting aside 10 percent of your budget each month is a concrete step toward better financial health."
6. Focus on your problem areas. When you go to the gym, you might avoid hitting the treadmill because it's so darn tedious—just like it's a real pain in the butt to sit down and track your expenses each week. But whatever you hate the most when it comes to your finances is probably the area that most needs your focus. "Avoiding these areas equates to throwing a blanket over them and hoping they go away on their own, which results in them actually need working out more than your other areas," points out Storjohann. Whatever your problem area, make a promise that you won't ignore it any longer. If, for example, you do hate to track your spending, you can make it easier to tackle by using an app, like Mint, to help.
7. Increase your automatic savings plan. If you haven't automated your savings, do it—stat. With direct deposits into an account, "you can use this to start a reserve fund, getaway fund, career-change fund, college fund, or start-a-business fund," says Liebowitz. If you've been there, done that, get your savings account in even better shape this year by increasing your contribution—even if it's by just $10 a paycheck. "Sometimes the road to fitness starts with making painless swaps or changes that you’ll barely notice," Liebowitz reminds us.
8. Move beyond a savings account. Saving your money is smart—but taking it out of a savings account and placing it into an investment account is smarter. That's because if you leave your money in a savings account too long, you're actually losing money. "It is ironic that these are called 'savings accounts' when your wealth actually shrinks in them yearly due to inflation," explains Kaplan. "Their minuscule interests rates are nothing compared to the growth you can see yearly from wise investing." One easy way to start investing that's not too scary is to open a Roth IRA. "This will allow your wealth to grow tax-free and accumulate years of compound interest towards your retirement," Kaplan says.
Of course, "just like getting in peak physical shape, adopting the right money habits won’t be a cakewalk at first," Kaplan says. "The good news, however, is that once you start developing the right routines and noticing their enormous benefits, they’ll become second nature. It’s almost impossible to turn your back on financial health once you get started down the right path."
