What do physical fitness and personal finance have in common? On the surface, there are a lot of differences between your fitness program and financial wellness. One involves income, spending, saving, and investing. The other involves physical activity, nutrition, and overall health. The reality is that financial fitness (and just fitness) are some of the most critical areas of our lives. It’s no coincidence that there are striking similarities between fitness and finance once you start digging in.
Financial Fitness is Behavioral
Fitness programs have always been a big part of my life. So when referring to fitness, we’ll discuss both sides of the equation, including physical activity and nutrition. Being raised by a dietitian and having a love of sports had me interested in both early on. Looking back, I feel fortunate to have built habits in both areas at a relatively young age.
Growing up with two younger brothers and a junk food-loving dad, the competition for unhealthy food was fierce. My mom would grocery shop every ten days, and the one bag of chips or a package of cookies would be gone within a day, sometimes minutes. That would leave us with rice cakes, fruits and veggies, and other healthy options for the rest of the week and a half. It was rough.
We had home-cooked meals that consisted of protein, carbs, and vegetables most nights. But, as I got older, I realized that having home-cooked meals 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 that one of the most critical nutrition lessons is “everything in moderation.” Eating fast food, sweets, or potato chips is fine occasionally as long as most of what you put into your body is more healthy.
Whenever a new diet fad becomes popular, I’ll ask my mom about it to get her thoughts. Usually, she 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 back it with “science.” I understand that some diets result from 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 means that everyone’s situation is different. It’s one of the reasons I believe there are so many personal finance bloggers, as we all connect to other people differently. I’ve learned through personal finance that if you want to change your behavior, you must change your habits.
Financial and fitness programs are behavioral, and they’re personal. Hopefully, this blog post resonates with some people, but it can’t be relatable to everyone. So all I can do is tell my story and share the experiences I’ve learned over my lifetime, hoping that it makes an impact.
We have a deep emotional connection to both food and money. For example, when I’m stressed and tired, I tend to stuff my face with junk food or drink alcohol. Similarly, others may practice “retail therapy” and take it to the malls to run up their credit card bills. 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 financial well-being will be helpful.
Similarities Between Fitness and Finance
Below are five similarities between fitness and finance I’ve observed over the years.
Simplicity is King
We all know we should eat better, work out more, and save money. But, 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 profound behavioral psychology question that, hopefully, we will hit on in the following few sections.
One reason we do not change our habits is that solutions are made overly complex. Many genuinely try to make changes, but we give up when things get too complicated.
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 a power food that increases good cholesterol. Similarly, fats were the devil when I was younger, 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.
In fitness, everyone has different opinions on the best or worst workouts. For example, according to “experts,” weight lifting makes you too bulky, long-distance running makes you skinny-fat, and yoga doesn’t burn enough calories. Of course, none of these are necessarily true, but when you’ve been focusing on improving your fitness program and hear similar sayings, it can be discouraging and leave you wondering if all the hard work you’re putting in will pay off.
In financial fitness, the alphabet soup of 401(K), IRAs, index funds, mutual funds, life insurance, bonds, fiduciary, money manager, and so much more can be highly confusing. It’s an industry where professionals benefit financially from making products overly confusing. So how do we even know where to start with many mixed messages?
When we’re changing habits, complexity is the enemy of progress. So 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 financial knowledge, 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
How do you lose weight?
Count your calories. Every single thing you eat.
How do you improve your finances?
Track every dollar you spend.
How do you improve your workouts?
Record every workout in a journal so you can monitor progress.
Here’s the problem: tracking calories or dollars isn’t fun for people like me. I’ve gone on record stating how much I’m not too fond of budgeting. 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 the progress has been noticeable when I have. Thankfully we live in a generation that provides tools to help us easily track our fitness and personal finances.
If you need to make significant changes with your fitness or finances, trust the process and commit to tracking 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 don’t have many successful interventions to help people maintain those changes over time,” says Jennifer Sumner, Ph.D., assistant professor of behavioral medicine.
Research shows that making behavior changes is difficult. This is especially true with the food we eat, the money we spend, and how we work out.
Humans are not rational creatures. This is an important point because so many models and research efforts in the United States are based on the assumption that humans think rationally. Yet, over and over again, we have proved this to be wrong.
So, if many humans are irrational, how do we influence behavioral change 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 challenging, 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, many others could make significant lifestyle changes by changing a few behaviors. This is true in fitness and finance.
This fascinating topic would require several blog posts to dig into and explore. For now, we’ll acknowledge that changing our behaviors is hard, and we see similar fitness and personal finance patterns.
Small Wins Equal Big Results
In personal finance, compound interest has been called the “eighth wonder of the world.” A relatively small amount of money can compound 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 massive difference over the years. You’re investing in yourself when you skip the candy bar or push through to the gym when you don’t want to. 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 turned 41 last year. I’ve noticed that this seems to be the age where you can 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 see those who 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 valid reasons for struggling with fitness or financial well-being. However, with everything said above, we must acknowledge that factors outside our control influence our daily habits in these areas.
Every year I try to make it to my doctor for a biometric screening. But unfortunately, my cholesterol numbers are higher than usual, almost no matter what I do. This hereditary issue makes it much more difficult to control than other people. Sure, working out and eating better can help lower my cholesterol. But it seems like no matter what I eat or how many times I work out, my numbers will be higher than many others.
We all have something that is a legitimate hindrance to fitness or finance. For example, an injury can keep us out of the gym for long periods. 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 finances is that we can do everything right, and something entirely out of our control derails us.
With financial fitness, systematic inequality issues impact specific groups of people more than others. This is also worthy of a post for a different day, but it’s essential to acknowledge it. The research shows that you can take two people with similar education and skills yet different ethnicity; one group makes less income and has a 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 areas between legitimate hindrances and where we make excuses. With that being said, it would be unfair not to acknowledge that factors outside our control impact our fitness, nutrition, and finances.
Financial Fitness in Summary
We can apply the principles above to many areas besides fitness and finances. 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 must acknowledge that life isn’t always fair, and sometimes forces out of our control keep us from reaching our goals.
Regardless, many 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 massive difference.
This post originally appeared on Financial Pilgrimage.
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Mark is the founder of Financial Pilgrimage, a blog dedicated to helping young families pay down debt and live financially free. Mark has a Bachelor’s degree in financial management and a Master’s degree in economics and finance. He is a husband of one and father of two and calls St. Louis, MO, home. He also loves playing in old man baseball leagues, working out, and being anywhere near the water. Mark has been featured in Yahoo! Finance, NerdWallet, and the Plutus Awards Showcase.