Financial management is something you need to get a good grasp on for various reasons. For one, it can help you achieve your long term financial goals. It can also strengthen your budget to make it more proactive as it takes on your daily expenses. The ability to manage your finances also gives you the chance to manage your stress level as well.
As it improves your finances, it lowers the number of things you need to worry about. Once you are able to properly manage your finances, you have time for other important things. Rather that losing sleep thinking about your looming card payment, you can improve on your hobby. It might even be a great alternative source of additional funds for your budget.
However, with all these benefits, taking financial management seriously is not as easy as it might seem. This is true especially at the start of the year. A lot of people are still reeling in from a holiday state of mind. This makes it a lot more challenging to sit down and focus on finances. You might even have other priorities in mind with your resolution list.
According to NBCnews.com, focusing on health remains to be a top resolution for people. This usually entails a healthy dose of integrating an exercise routine into their schedule. This is one of the reasons why health clubs and gyms are packed at the start of the year. It might surprise you to know that there is an uncanny resemblance between exercise and financial management. This is true especially if you are doing both for the first time.
Here are just a few of the similarities you might notice between exercising and managing your finances.
It will hurt
The first few days when you start to exercise, your body will be sore and it will hurt. This tends to happen when you are either doing it for the first time or returning from a long break. Your body is adapting to the new physical load it exerted. It is not unlikely that you would have a hard time lifting your shirt up after returning home from the gym.
As you take on financial management, expect to have some challenging times ahead. You might come to realize that you need to cut down on some habits to save costs. To build up your credit score, you might have to keep a close eye on your payment schedules. There will be a lot of firsts which could make you uneasy or uncomfortable.
You need structure
Once you decide to take up exercise as part of a better you this year, you need to have structure. A routine or schedule is a good start. You cannot just show up to the gym without any plan. You at least need to have an idea what your goal is. Are you trying to lose weight or gain muscle? Are looking for flexibility or trying to add endurance?
The same goes with your finances. You need to have a plan on how you want to get to your goal. If you are trying to increase your reserve funds then plot out a strategy on how you would contribute to it monthly. If you plan to retire early then maxing your annual allowable 401(k) contribution is one strategy. The idea is to have a plan on how to reach your financial goal.
Get professional help if needed
As soon as you get serious with your physical health and being that it is your first time, a professional can help you. In order to put a structure in your exercise, a professional trainer can assess you and come up with a suitable program. They will use their experience in plotting out the best strategy for you to reach your goal.
In financial management, you can also look for professionals to help you in your journey in getting to your target. There are a lot of financial experts you can talk to depending on what you need. If you need to set up a bank account then head over to the nearest bank. If you need to plan for your retirement then look for a professional that can help you diversify and safeguard your funds.
Monitor your progress
Financial management will work best if are able to put a monitoring system in place. Just like how you would step up on a scale from time to time to check your weight. You also need to look at your funds every now and then to make sure that you are on track. If you seem to be lagging behind, you need to make sure you address the issue immediately to get you back on track.
Exercise is just part of the equation
When you are putting your new year’s resolution list, you might focus too much on the exercise part. Eatright.org shares that exercise is just part of your total health and well-being. You also have to factor in nutrition and even rest in your total plan. Focusing on just one aspect could derail you and make you lose sight of your goal.
Managing your finances works with the same principle. If you just keep focusing on one part, you could end up putting other areas at risk. Just like if you allot all your funds for your mortgage payments because you want to pay off the house quickly. In the process, you neglect to pay your taxes and even insurance. This puts the very same house at risk because a lien can be placed by the county for non-tax payments.
Financial management is a habit you need to develop over time
Once you start going to the gym, you need to make a habit out of it. This helps you stick to your program and you get to reach your goal on schedule. There would be times when you just don’t feel like standing up and driving to the gym. However, the more you put your mind into it, the easier it would be to become a habit. Doing it becomes a lot easier.
Have you ever wondered why some people are in credit card debt? One of the reasons is they have developed credit card habits that wreck havoc on their finances. The longer you have been doing it, the more natural it gets. This is why managing your finances needs to be a continuous process so develop a habit of taking care of your money.
Perfection is a goal
improvement is the name of the game and perfection is a moving target you will never reach. When you start exercising, you have an idea on what you want. An ideal weight, being able to set a personal record on your next run or even getting some muscle definition. Once you reach this goal, you might think that you already reached perfection. You then start to downslide and go back to your old ways.
When you are managing your finances, you need to constantly make improvements rather than aiming for perfection. As soon as you reach your goal, set another one that you need to aim for. If you have reached the amount you need to set aside for your reserve funds, look at other aspects of your finances. Your retirement fund or your student loan debt payment might need to look into. You can set your sights on them next.
Financial management may not be as easy as it seems but it is achievable. Just like how you are setting your sights on exercising and improving your overall physical health. It would be challenging in the beginning but as you go along, it becomes a little easier.