What do physical fitness and personal finance have in common? On the surface, there are a lot of differences between personal finance and fitness. One involves income, spending, saving, and investing. The other involves physical activity, nutrition, and overall health. The reality is that these are two of the most important areas of our lives. It’s no coincidence that there are striking similarities between both fitness and personal finance once you start digging in.
Fitness = Physical Activity + Nutrition
Fitness has always been a big part of my life. When I refer to fitness in this article, we’ll be talking about both sides of the equation — physical activity and nutrition. Being raised by a dietitian and having a love of sports had me take an interest in both early on. Looking back, I feel fortunate to have built habits in both areas at a relatively young age.
Growing up in a house with two younger brothers and a junk food-loving dad, the competition for the unhealthy food was fierce. My mom would go grocery shopping every 10 days or so and the one bag of chips or package of cookies would be gone within a day, sometimes minutes. That would leave us with nothing but rice cakes, fruits and veggies, and other healthy options for the rest of the week and a half. It was rough.
Most nights we had home cooked meals that consisted of a protein, carbs, and vegetables. As I got older, I realize that having home cooked meals most nights was a rarity compared to other households.
We’d still get fast food on occasion. My dad was a fast food manager after all. With three kids in the house sometimes the easy thing was to bring home a big bag of burgers and fries so we could eat and then make our way to evening activities. This taught me one of the most important lessons on nutrition — everything in moderation. Eating fast food, sweets, or potato chips is usually fine on occasion as long as the majority of what you put into your body is more on the healthy side.
Whenever a new diet fad becomes popular, I’ll ask my mom about it to get her thoughts. Usually, she just rolls her eyes. Over the years there have been so many diet fads. Atkins, Paleo, Intermittent Fasting, Mediterranean, South Beach, and on and on. Almost everyone will swear by one of these diets and will back it by “science”. I totally understand that some diets are the result of personal beliefs or food allergies. However, most people latch onto these fad diets, stick with them for a while, and then end up right back where they started. We’ll hit on this topic more below.
Personal Finance is Personal – So Is Fitness
When attending FinCon, a conference for personal finance nerds like me, the theme was “personal finance is personal”. This statement basically means that everyone’s situation is different. It’s one of the reasons why I believe there are so many personal finance bloggers as we all connect to different people in different ways. What I’ve learned through personal finance is that if you want to change your behavior you have to change your habits.
Fitness, like finance, is behavioral. And it’s personal. Everyone’s situation is different. Hopefully this blog post resonates with some people, but it’s impossible for it to be relatable to everyone. All I can do is tell my story and share the experiences I’ve learned over my lifetime with the hope that it makes an impact.
We have a deep emotional connection to both food and money. I know when I’m stressed and tired that’s when I tend to stuff my face with junk food or drink alcohol. Similarly, others may practice “retail therapy” and will take to the malls to run up their credit card bill. It’s a vicious cycle that hits us in our weakest moments. So how do we change our habits? I’m not sure, but maybe understanding the similarities between fitness and finance will be helpful.
Similarities Between Physical Fitness and Personal Finance
Below are five similarities between fitness and personal finance that I’ve observed over the years.
Simplicity is King
We all know that we should eat better, workout more, and save more money. If you ask 100 people I’m guessing 99 will tell you at least one thing they could do to make improvements. So why don’t we change our habits? This is a deep, behavioral psychology question that hopefully we hit on in the next few sections.
I believe that one reason we do not change our habits is because solutions are made overly complex. Many of us genuinely try to make changes, but when things get too complicated, we give up.
Remember when eggs were bad for you? Everyone with moderate to high cholesterol used to eat egg beaters (and probably still do), which is a gross substitute for real eggs. Fast forward a few years and now eggs are considered a power food that increases good cholesterol. Similarly, when I was younger fats were the devil and carbs were A-OK. Now, many people eat high fat diets and have sworn off carbs. These foods haven’t changed over the years so what is different?
With all of this conflicting information, it’s no wonder we’re so confused all the time.
In fitness, everyone has different opinions on the best or worst workouts. According to “experts” weight lifting makes you too bulky, long distance running makes you skinny-fat, and yoga doesn’t burn enough calories. None of these are necessarily true, but when you’ve been focusing on improving your fitness routine and hear similar sayings it can be discouraging and will leave you wondering if all the hard work you’re putting in will pay off.
In finance, the alphabet soup of 401(K), IRAs, index funds, mutual funds, whole life insurance, term life insurance, bonds, fiduciary, money manager, and so much more can be extremely confusing. It’s an industry where professionals benefit financially from making products overly confusing. With so many mixed messages, how do we even know where to start?
When we’re changing habits, complexity is the enemy of progress. Here’s what simplicity looks like in each of these areas.
- Nutrition: Eat real food and not too much.
- Fitness: Get moving doing something you enjoy.
- Finance: Spend less than you make and invest the difference in something you understand.
Keep it simple with fitness and personal finance and you’ll get 80 percent of the way there. It will also be your best bet at making changes to your daily habits, which is easier said than done.
“You can’t manage what you can’t measure.” – Peter Drucker
What’s the best way to lose or gain weight? Count your calories. Every single thing you eat.
What’s the best way to improve your finances? Track every dollar you spend.
What’s the best way to improve your workouts? Record every workout in a journal so you can monitor progress.
Here’s the problem: for people like me, tracking calories or dollars isn’t fun. I’ve gone on record stating how much I dislike budgeting. In fact, we don’t budget. Instead we use an approach called the anti-budget. Tracking calories, dollars, or workouts may not be for everyone, but it WORKS!
If you’re not interested in tracking calories or dollars, see if you can find technology to help. I’ve used apps such as Mint (for money), MyFitnessPal (for nutrition), and JEFIT (for workouts). Honestly, I don’t do any of these regularly but when I have, the progress has been noticeable. Thankfully we live in a generation that provides tools to help us easily track our fitness and personal finances.
If you’re needing to make big changes in fitness or personal finance, trust the process and make a personal commitment to track your food intake, dollars spent, and workouts completed. You’ll be shocked at the results.
Behavioral Change is Difficult
“There’s been a lot of work done to help people change their behavior, but we really don’t have many successful interventions to help people maintain those changes over time,” says Jennifer Sumner, PhD, assistant professor of behavioral medicine.
Research shows that making changes to behavior is difficult. This is especially true with the food we eat, the money we spend, and the way we work out.
Humans are not rational creatures. Which is an important point because so many models and research efforts are based on the assumption that humans do think rationally. Over and over again we have proved this to be wrong.
So, if many humans are irrational, how do we influence behavioral change by using rational advice? This is the million dollar question.
Take nutrition for example. A common statistic in the industry is that 95% of diets fail and most will regain any weight lost during the next 1 to 5 years. Now I know this isn’t all behavioral. Losing weight can be really hard and we can do all the right things and still not make progress.
Regardless, while acknowledging that some people have medical issues or did not hit the thin gene pool lottery, there are many others that could make significant lifestyle changes just by changing a few behaviors. This is true in fitness and personal finance.
This is a fascinating topic to me that would require several blog posts to really dig into and explore. For now we’ll just acknowledge the fact that changing our behaviors is really hard and we see similar patterns in fitness and personal finance.
Small Wins Equal Big Results
In the personal finance space, compound interest has been called the “eighth wonder of the world”. Investing a relatively small amount of money can compound into huge gains down the line.
Fitness and nutrition have similar compounding effects, especially as we get older. The habits we form when we’re young, such as eating well and working out regularly, make a huge difference over the years. When you skip the candy bar or push through to make it to the gym when you don’t really want to, you’re making an investment in yourself. These small decisions add up to big wins down the road. Don’t get me wrong, I eat candy bars way too often. I’ve probably had five this week, which isn’t great.
I’m now in my late 30s. I’ve noticed that this seems to be the age where you can really start to see who has taken care of themselves over the years and who hasn’t. And this isn’t about body shape or size because much of that is hereditary. What this is about is looking and feeling healthy. The small daily decisions and habits formed over the years compound and you can often visually see those that take good care of their bodies and those who don’t.
There are Factors Outside of Our Control
I know some of this article may come across as being pompous. Many may become defensive and provide very valid reasons for struggling with fitness or personal finance. With everything said above, we need to acknowledge that there are factors outside of our control that influence our daily habits in these areas.
Every year I try to make it to my doctor for a biometric screening. Almost no matter what I do my cholesterol numbers are higher than normal. This is a hereditary issue that makes it much more difficult to control than other people. Sure, working out and eating better can help lower my cholesterol a bit. But it seems like no matter what I eat or how many times I work out, my numbers are going to be higher than many others.
We all probably have something that is a legitimate hinderance to fitness or personal finance. An injury can keep us out of the gym for long periods of time. Some of us may have been born with a health related issue that doesn’t allow us to work out a certain way. One of the most frustrating things about fitness and personal finance is we can do everything right and then something completely out of our control derails us.
With finances, there are systematic inequality issues that impact certain groups of people more than others. This is also probably worthy of a post for a different day but for now it’s important to at least acknowledge. The research shows that you can take two people with similar education and skills, yet different ethnicity, and one group on average makes less income and has lower net worth than the other. This is a problem and one that needs to continue to change.
What is important is that we try to control what we can and push through other barriers to the extent possible. There is a lot of gray area between hinderances that are legitimate and where we simply make excuses. With that being said, it would be unfair to not acknowledge that there are factors outside of our control that impact our fitness, nutrition, and finances.
Similarities Between Fitness and Personal Finance
The principles above can be applied to many areas besides fitness and personal finance. Keeping things simple, tracking progress, considering the behavioral side, and making progress by taking small steps can apply to many different areas. At the same time, we have to acknowledge that life isn’t always fair and sometimes there are forces out of our control that keep us from reaching our goals.
Regardless, many of the traits that make someone good with money also make someone good with fitness. Something not mentioned above that is a theme throughout this article is delayed gratification. I believe that delayed gratification is one of the keys to success in today’s instant gratification world. Saving money, working out when you don’t want to, and eating healthy even if it isn’t the best tasting makes a huge difference down the line.
Thanks for reading! If you can think of other similarities between fitness and personal finance share below in the comments.
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