Yahoo Finance How Managing Your Finances Is Like Losing Weight
People looking to manage their finances can take a note from the weight-loss pros. Many of the same tricks and challenges apply to both activities, whether it's losing 25 pounds or saving $25,000.
"It can be a challenge to make changes in both of those areas because it's really about changing our habits," says Catherine Hawley, a certified financial planner based in Monterey, California.
[See: 10 Foolproof Ways to Reach Your Money Goals.]
So, what can people pursuing a financial makeover learn from their peers chasing a fitness transformation? Here's how fattening up your wallet is like slimming down your waistline.
You need a system that works. Whether it's as strict as counting calories or as simple as committing to eating five veggies each day, healthy people know that you need to find a system that works for you and helps you stick to your goals.
Managing your finances also requires implementing a good system, whether it's using a budgeting app or scheduling regular check-ins with your financial advisor.
"Forcing yourself to balance your checkbook is a lot like tracking everything that you eat when trying to get healthy," writes Andy Jamison, a fee-only financial planner at Main Avenue Financial Services in Beaverton, Oregon, in an email. "[It's] not much fun to do but definitely worth the effort as you see how much spending goes on that isn't in alignment with your goals."
Make it a habit. Fitness gurus will tell you that losing weight requires permanent lifestyle changes that you can maintain in the future.
Ditto for financial management: Successfully fixing your finances requires long-term tweaks to your lifestyle. It's about: "What decisions can we make to alter the current glide path that we're on?" says Scott Cole, president of Cole Financial Planning and Wealth Management in Birmingham, Alabama.
[See: 8 Big Budgeting Blunders -- and How to Fix Them.]
Don't implement financial changes that are too strict or punitive. Give yourself room to breath as you pursue financial improvement, experts say. A less restrictive budget and savings strategy that you can stick to will trump a puritanical budget that you abandon quickly.
Remove temptations. Healthy eaters know that the best way to stay on track is to steer clear of the salty, sweet and savory treats that can derail their clean eating plan. The same logic applies to your money makeover.
"For weight loss, it's not keeping any dessert at home. For finances, it's setting up as many automations as possible," Hawley says.
Ways to automate -- and reduce temptation -- include automatically debiting cash into your savings and retirement accounts and putting bill payments on autopilot.
Another way to avoid temptation? Hawley recommends housing your emergency fund at a different bank from your savings and checking account. That way, you won't be tempted to tap your rainy-day savings for a non-emergency.
[See: Dear Younger Me: 12 Financial Truths We Wish We Knew Earlier.]
Attitude is everything. Weight-loss pros know that a positive attitude can spell success while a negative outlook can mean failure.
The same thinking applies to budgeting and saving. "Re-frame it," Cole says. "[Think of ] what you can eat, what can you spend, instead of what you can't eat, what you can't spend."
Good behaviors add up. Just as truly effective weight loss typically happens slowly, not instantly, good financial management effectively grows your net worth over time.
"The ability to focus on long-term results versus short-term is really important," Cole says. "Let time be your friend and not your enemy."
Financial goal-setters should consider the long-term financial payoffs of their actions. Growing a retirement fund, which should cash in on the long-term benefits of compounding interest, takes decades. Fully funding an emergency savings account can take years. Even paying down debt is an exercise in long-term money management.
... and so do mistakes. While you can't beat yourself up each time you go off-diet or off-budget, keep in mind that habitual errors do add up.
"You make a mistake two or three times and all of a sudden that cumulative effect starts to show with your waistline," Cole says.
Making basic financial mistakes repeatedly can add up as well. For example, Cole says, if you're buying investment products based on merchandising, not analysis, or always pulling out of your investments when the stock market takes a dive, those bad decisions will tally up to take a bite out of your retirement account.
Says Cole: "Those impulses can add up."
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