Keeping Your Financial Mind In Shape

Personal Money Planning |


By Gary Silverman, CFP®

I’ve often used running analogies to discuss investing topics here before.  After all, the brain that we use to reach a financial goal is the same brain we use to get us across the finish line in a race. That’s why an article about maintaining fitness goals that appeared in this newspaper a little more than a week ago interested me.

In it, Angie Ferguson, an exercise physiologist, was discussing how it is often hard for people who reached an athletic goal to keep on with their exercise or training routine. “Maintaining a change in behavior is often more difficult than making the initial change itself…” she wrote.

She went on to point out some ways we get stuck, along with some tips to get unstuck. Here I take her points and apply them to your less cardio-intensive (hopefully) financial race. 

Take budgeting, for instance. Let’s say that you modified your budget to be able to save up cash for a vacation, pay down debts, or build your retirement nest-egg. When those goals are reached, you feel a sense of accomplishment…you’ve crossed the finish line.

Congratulate yourself, but you really haven’t crossed the finish line—you’ve crossed a finish line.

Vacation over? What about the next one…or some other discretionary “fun” goal you could strive toward?

Debts paid off? Now is a great time to build up that emergency fund, shift your savings toward new car, or at least ensure that your budget keeps you from building a credit card balance up again.

Nest-egg complete? Then it’s time to shift from a main goal of building up your investments to monitoring and adjusting your spending. That way, you won’t have to take more out of that nest egg in the future in order to cover the overspending of today.

Some ways to help you keep going once a big goal is reached is to develop smaller goals where the end of one is the beginning of another. This helps both in making your “big” goal seem more manageable and helps you from stagnating once you complete it.

It also helps to write down your goals. Most coaches, whether athletic or financial, point to the positive psychological aspect of making thought more tangible. But I’d like you to not just post your goal or series of goals, but also the “why” of the goal. Knowing why you wanted to accomplish a successfully completed goal can help you keep up the habits you built while striving for it.

While running, I don’t concentrate on completing my big goal of crossing the finish line. Instead, I focus on getting to that tree up ahead, catching the next runner in front of me, or getting to the next rest stop. If I keep doing that, the race doesn’t seem like a marathon, but a series of smaller, less intimidating jaunts. I also make sure that there is a future race or running goal already identified long before the starting gun of the current one.

Don’t worry, I give myself a little break, and a lot of self-congratulations for what I achieved, just as you should. The key is to not rest on your laurels. It’s hard to stagnate if you keep moving forward.

Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing.