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How to achieve financial fitness (and why you need to) 

Just like with physical fitness, you can achieve financial fitness and change not just your relationship to money but your finances themselves

Here’s a simple maths question: How much time do you spend on your physical fitness in one week? For most of us, it’s easy to tot up the number of hours we spend exercising, walking, yoga-ing, etc. Add to that the amount of time you spend doing related activities: reading magazine articles, watching social media feeds from fitness influencers, searching for stretches for your hamstrings or shoulders, maybe even booking a massage to keep you loose. Now add to that the amount of time you spend even thinking about physical fitness: planning a workout or deciding what you’re going to do. Imagine that you spent the same amount of time on your finances. Imagine just how good they would look.

A strong current account, robust investments, a pension with endurance. Too often we think about our finances overall as something boring, confusing and stressful. Like a visit to tiresome relatives, we put off doing it as long as possible and then can’t wait til it’s over. Yet having healthy finances in midlife is actually easier than you think, and financial fitness is as important as the physical kind for your health and wellbeing.

What is financial fitness?

The meaning behind the term ‘financial fitness’ is simple: It means having the money you need, when you need it. In other words, living within your means, with minimal or no debt and healthy savings and an emergency fund.

And while finances can seem difficult to master at first, thinking about them as financial fitness makes them manageable, understandable and do-able.

The steps to financial fitness

  1. Remember little and often – We all know the best way to really get in shape is to work out regularly. To key to getting comfortable with your finances is to get really familiar with them — not Tinder date familiar, married for 30 years familiar. Check your statements when they arrive, read about your investments, keep tabs on your budget as a regular part of your week (yes, every week). Even if you start this process by simply monitoring what you’re spending and what you’re earning, you are normalising the act of being financially aware. It’s as easy as opening your banking app and reviewing your transactions, opening your credit card app and looking at what you’re spending, opening your investment app…you get the idea.
  1. Cut out the junk – An occasional takeaway is a treat, but you don’t want one as your nightly meal. Careless spending is like junk food. Noon is not here to tell you don’t buy coffee from a shop anymore. That bit of advice seems to always be the top of the list when talking to women about money. Rather, it’s more helpful to ensure the things you spend money on are important. If you love your regular decaf soy latte from the local café, get it. Maybe you quit your one-click habit on Amazon instead. Just trim the spending that doesn’t really add to your health, wealth or wellbeing.
  1. Don’t be size-ist about your money – Sometimes I feel bad about my money or my pensions: they are too puny. I’ll never have enough to — fill in big financial goal here– so what does it matter if I blow a couple hundred on some new shoes? Every bit of money you have is important. Treat it with respect. This applies not only to spending but also to things like investment accounts. Are you throwing away money with high fees because you think you don’t have time to do the research, because it’s not “worth it”? It is. We won’t invoke the slogan of a large supermarket chain, but we will say that respecting what you have and what you can control helps you have more of it.
  1. Embrace training – We don’t expect to automatically ‘know’ how to do a breast stroke or a sun salutation. Don’t expect yourself to understand everything about money just because you have some in your bank account. It’s OK not to know and to get confused. Buy books (or if you’re being frugal, check them out from the library), read the business pages (you’ll find them right before the Style section), get alerts from financial sites (I like Yahoo Finance, which is free and cleanly written). Many investment platforms also provide regular newsletters for customers with advice on planning. Just like with yoga, think of it as your practice. Tip: Check out the list of resources that helped me and my fellow midlife women on our podcast for beginning investors, Women Take Stock.
  1. Be positive – Nothing kills a new endeavour like a little voice in your head telling you it will never work. Let go of negative ideas like ‘I’m terrible with money’, ‘I never have enough money and never will’ or ‘Being a millionaire is a pipe dream.’ Instead embrace new positive healthy ideas: I can have a secure financial future. (Be sure to read our post about How to define your money goals, which addresses the way we think about our finances.)
  1. Put in the time – You likely spend more than an hour each week working on your physical fitness. Set aside a regular time and spend one hour a week to work on your financial fitness, with whatever needs attending to that week. You probably spend more time browsing the internet on a Sunday.
  1. Invest!While I put money away for my pension with each job I had, I only started investing in my 50s, getting into it with a group of friends. We were all new to it, began sharing information and launched our podcast – Women Take Stock  to support and encourage other women to do it too. According to research from the Wisdom Council, being encouraged to invest is a significant factor in becoming an investor, and women are less likely to be encouraged.

Why is investing important?

Why is investing so important? It allows the wider financial system to work for you. It can build wealth in a way that doesn’t simply rely on what you can bring in with your job – good news for folks in creative, caring or similarly valuable-but-lower-paid professions. Wealthier people are far more likely to have accounts holding stocks than middle-class families, who in turn are far more likely to be in the market than working-class or poor families, according to American research reported in the NYTimes. That’s not just a coincidence.

Coronavirus has impacted women by hitting hard sectors where we are more likely to work, we have picked up more of the childcare and homeschooling. And we continue to experience a gender pay gap and pension gap. Investing is a way to narrow those differences.

Starting small with investing

My own first stock investment started very small: a single share of a gaming stock. It cost a little over £100 and I’d spent four weeks researching it. It went up by a couple of pounds and I felt like a genius. Over time, doing research for myself and the podcast, sharing ideas and reading more, I started to better understand investment principles, get comfortable with what I could afford to put in and handle the emotional elements of losing money. (When investing, it’s important most of all to understand your attitude toward risk and know that investments can go down as well as up.)

The good news is, the ability to make money from investing has fewer barriers to entry these days. New apps such as eToro and more traditional providers like AJ Bell’s Youinvest platform make it easier than ever to trade with no or low fees.

Risk, confidence and financial fitness

Research done in collaboration with the Dutch central bank in March 2021 shows that women do slightly worse than men when quizzed on financial literacy (60% to men’s 75%), but the problem is women felt vastly less confident. “Many women think they don’t know. But when you force them to give an answer, they often actually do know,” says Annamaria Lusardi, one of the study’s authors and founder of the global financial literacy centre at George Washington University.

However, women investors (that is, women who are actually investing) feel they’re just as confident as men and are more likely to talk about investing, according to The Wisdom Council. And you know how women love to talk. That means more women hear about investing and financial fitness and are encouraged to take control of their finances and they then talk about it… Since I started investing I have made some money. I’ve also grown exponentially in my confidence. I understand the stories I read in the financial press. I’ve examined my pensions and started making choices that better fit my goals. I’m not where I ultimately >want to be with my finances, but that’s OK.

Financial fitness, after all, is a satisfying marathon, not a sprint.

Next: How to determine your financial goals

Jennifer Howze