We make exercise a regular habit (or at least try to) in order to keep our bodies healthy and strong. Shouldn’t we also exercise our money muscles? Otherwise, those muscles become complacent and atrophy from the lack of use. Regular exercise can help prevent injury and make us stronger and more flexible. Similarly, flexing our money muscles can reduce the chance of making financial mistakes and help us recognize the first sign of trouble. Here’s how you can exercise your money muscles.
When I run, I enjoy pushing myself and see if I can go faster than the previous day. That’s how we improve and better ourselves. When it comes to our finances, it’s easy to set a budget and forget it. We go on our happy lives and do the same thing day in and day out. Why not challenge yourself and push yourself harder? It doesn’t hurt to challenge yourself and see if you can do even better.
For example, every year, I challenge myself add 10% more money to my taxable investment account. If I invested $3,000 last year then this year I’ll invest $3,300 and next year I will invest $3,630. I like to re-evaluate this every year to see if I push myself harder and save more. The additional savings usually come from raises at work so this is a good way to prevent lifestyle inflation.
Here are some other ways to work out your money muscles. Try trimming your food budget every month. Challenge yourself to reduce your discretionary spending. See if you can bump up your 401k contributions from 7% to 8%. Push yourself to see if you can make do with less. You might be surprised that after awhile you get used to it and don’t miss your previous lifestyle.
When you take up running for the first time, your lungs feel like they’re on fire. After sticking with it for awhile, you’re soon able to run 2, 3, 5 miles and more. Working your financial muscles is like that. At first you might be uncomfortable but soon you’ll feel like you’ve been doing this your whole life.
It’s good to cross train when you exercise your body and the same is true for your money muscles. Cross training means taking up exercises that are different from what you normally do. The idea is to get a complete workout. If you’re normally a swimmer, you might add some weight training because swimming isn’t a weight-bearing exercise. A runner might take up yoga to stretch muscles that become tense from running.
In the financial realm, it’s good to choose different types of exercises to work your money muscles. I’m generally a frugal person and do a pretty good job at saving money (if I may say so myself, lol). Lately though, I’ve been exploring ways to increase my earning. I realized that increasing earnings is the best way to save more money. My full-time job pays me the same amount of money every 2 weeks. Even if I save 100% of my paycheck, the amount I can save will always be limited the amount on my paycheck. If I can make more money, I can save more money.
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Saving comes easiest to me though so when I’m cross training my money muscles, I like to try different saving challenges. When the grocery budget is bloated, I use the freezer challenge and eat only what’s in our pantry and freezer. I like the no spend challenge when I really want to challenge myself and not have any discretionary spending for the month. You get the idea. It’s fun to try different things.
Focus on Proper Nutrition
To get the most benefit from your hard work, it’s best if you can take in proper nutrition. We know it’s important to cut the fat and reduce sugar intake. Doing it is the hard part. So, examine your spending and think critically about superfluous expenses that can be trimmed away.
Review your monthly spending and re-assess your budget. Be honest and see if there’s even more fat that you can cut away from your spending. Look at your credit card statements. Are you spending out of boredom or because you’re trying to impress friends and family? Focus on what’s necessary rather than what you think would look good to other people.
Try going a few months without cable. Challenge yourself to bring lunch to work everyday. The savings will add up faster than you think and the results might surprise you. It’s like cutting out soda. You save on calories and get more energy. Likewise, cutting cable saves you money and you’ll also end up with more free time!
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Track Your Progress
When you exercise your body, reaching new goals can help motivate your and keep you going. Similarly, tracking your progress when flexing your money muscles will help get your where you need to go. Write down your goals, make a list of what you’re trying to accomplish. Do you want to save $1,000 in 6 months? Perhaps you want to build up your emergency fund. Whatever it is, make a note and decide how you’re going to track your progress.
You can make a chart, use a journal, or an app like Personal Capital and Mint. Whatever your choice, tracking your progress will help motivate you and help push you to go farther. It’s also extremely rewarding to look back and see how far you’ve come. Knowing what you’re aiming for is one of the best motivators.
Your money muscles are going to be so ripped that you can’t help but flex them. What do you do to keep your money muscles healthy and strong?