Fitness Pal

January 20, 2020

Picture it. New Year’s Eve. 2013. A couple of friends and I were sitting around doing what most people do on this night: making resolutions. And – like the vast majority of you out there – getting “healthy” (i.e.; losing weight and inches) was tops on our list. As anyone who has ever attended a Weight Watchers meeting will tell you, one of the secrets to success in this area is accountability. In that spirit, we devised a plan. We would weigh and measure ourselves every Friday morning, take a pic of our feet on the scales and text it with our “numbers” to each other. With that, Fit Feet Fridays was launched!

Needless to say, we all went out and got pedicures that January and we all skipped seconds every Thursday night while the challenge was on. Not surprisingly, this in your face (and on your iPhone) form of accountability worked and we all met our health goals that year.

Then, as with most things that work, we stopped doing it. I’ll never figure that one out.

So what does this little story have to do with financial planning?

It should come as no surprise that we – as a province and country – are in a cash flow crisis. Staggering debt and financial uncertainty have become a reality for many households since the oil and gas peak. As a result, over the last several years I have spent a lot of time helping clients address their own cash flow concerns. Make no mistake. It is hard work. As with our health and wellness, there is no magic pill. Gaining cash flow control involves getting real with your numbers (as scary as they may be), identifying what is important to you, letting go of the spending habits that no longer serve you and committing to a combination of short and long term goals.

The real “magic” of the process is sharing that information with someone and knowing that someone is going to check in on your progress. In some cases, the magic is in couples simply sharing the numbers with each other and taking stock for the first time in their lives. All this accountability success got me thinking, “Could Fit Feet Fridays be modified to keep us on track with our money goals like it had done for our fitness goals?”

Financially Fit Fridays does have a ring to it!

As a Financial Advisor, I have conversations everyday with clients about both their health and their money. People will gladly share information regarding their height, weight, prescriptions, family health history, etc.. Ask them how much they owe on their credit cards and they clam up. You can almost always feel a shift, an anxious, shameful, nervous energy surrounding these topics.

So if people are hesitant to share their money matters with their Advisor, why in the name of all things holy would I expect them to be comfortable sharing them with a buddy?

Firstly, because accountability works. Secondly, there is a certain strength and comfort in knowing we are not alone.

I am willing to bet that whoever you chose to be your financial fitness pal would have very similar financial challenges and goals as you. Birds of a feather, after all. I am also willing to bet that just verbalizing (or better yet, writing down) some tangible goals with a buddy or your partner will increase your likelihood of achieving those goals. Clarity always does.

Why not give it a try?

I’m not suggesting you have to print off a copy of your pay stub and hand them over to a friend as a starting point. Baby steps. Rather, as a seasoned setter of both health and financial goals, I know small changes are usually easier to stick to and always yield the most sustainable results.

So here are 5 Simple Ideas to get you and your buddy started on your quest for financial fitness this year:

  • Each of you set a grocery budget for February (all the leftovers should be gone by then). Keep your receipts and tally them up at the end of the month. See who stayed within their budget and share pitfalls and pointers. Beware the trips to Costco!
  • Pick a credit card with the smallest balance owing and set a target date to have at least that one paid off before the deadline. It’s up to you if you want to share details re: amount owed or interest rate, but definitely share when you have met your challenge.
  • Write down an estimate of your income and expenses for one month and then – on your own or with your buddy – track your actual spending. Make a bet as to who will come closest to their estimate as a percentage overall. Winner buys coffee for the loser.
  • Now that you know where your money goes, commit to saving at least 10% of your annual income in some form of savings plan by year end. Hold each other accountable (even if you don’t share the dollar amount), by tracking how much you have saved as a percentage of your annual salary and reporting it to your buddy each month.
  • Pick one “luxury” item each and challenge yourselves to skip it for three months. Examples could include having your nails done, your house professionally cleaned or your pet groomed. Do it yourself and put the money saved in your Tax Free Savings Account. If you don’t have a TFSA, start one.

Financial Fitness? You got this!