How to improve your financial fitness

If your bank balance isn’t trending in the right direction, or if you just want to bump it up a notch, you’re probably due for a financial health checkup. Here’s your road map to a healthier financial future.

More than just money

Getting a handle on your financial well-being does a lot more than boost your bottom line: it inevitably spills over into your physical and mental well-being. A reduction in stress related to financial issues leads to better sleep, increased energy, improved relationships, and stronger mental and emotional health.

Where to start

Steve Bridge, an Advice-Only certified financial planner, says one way to take the pulse of your financial health is to track your net worth monthly for a year, then moving toward quarterly and then semi-annual tracking. Your net worth is your assets (everything you own) minus your liabilities (everything you owe).

“If your net worth is trending upward, you’re on the right track,” says Bridge. And if it’s not, you should find out why. This often comes down to simply making more or spending less, says Bridge. It also helps to craft a forward-looking budget.

“Expense tracking is great, but it looks backward,” says Bridge. To make a forward-looking budget, you’ll want to open multiple free savings accounts for specific purposes, including travel, clothes/gifts, house expenditures, and so on. Put money in each of these categories monthly. Spend whatever is in the designated category’s account, but no more than that, says Bridge. That way, you’re never going into debt to buy anything.

Inquire about your investments

Check your investments once or twice a year. They should be the same or better than the relevant benchmark, says Bridge. If your investments are trailing those relevant benchmarks, ask your investment advisor why.

According to Bridge, it’s also important to ask about the fees you’re paying on your investments, as they can have a major impact on long-term wealth. Everyone pays fees, says Bridge. However, these fees are often hidden. You should be paying less than 1 percent in investment fees.

Don’t hesitate to ask your investment advisor questions. “No one cares more about your money than you do,” says Bridge. “If anyone makes you feel dumb when asking your questions, take your money elsewhere.”

Managing your mental health in the meantime

What should you do when there’s no quick fix to your financial stress? Amanda Kruger, a licensed professional counselor specializing in financial trauma and working through money stress, offers these suggestions.

  1. Make a plan and follow through with it. For instance, make a debt repayment plan or a plan for how to prioritize your money.
  2. Keep in mind that money is a renewable resource. There’s always money out there, and you’re fully capable of making more of it.
  3. Remember your self-worth is not equivalent to your net worth.