Listen to Kevin on Wisconsin Public Radio

On Your Money® Members | Sign Up (FREE)Login

Logo

New Year's Resolutions

by Kevin McKinley - January 4th, 2015

Posted Under: around the house

Year after year, two of the most commonly-cited New Year’s Resolutions are to “lose weight” and “save money”.

The difficulty in achieving these goals is evident by their perennial appearance on our list of things we would like to improve in our lives, as well as the billions of dollars and thousands of hours we spend trying get richer and/or thinner.

The good news is that the path to success in these areas is similar, and in some cases can even be accomplished simultaneously.

1. Establish a baseline

Before you can lose pounds or gain dollars, you first need to know where you stand today, as painful as that information might be.

Start by using some of your money to invest in a decent scale, and weigh yourself. If you want to take it a few steps further get an evaluation of your health from your physician, or a test of your physical condition at a local gym or fitness center.

For your fiscal fitness, you can begin by calculating your net worth. Add up all of your assets (i.e., savings, retirement accounts, home value, etc.), and subtracting your debts (credit cards, mortgage, car loans, student loans, and the like).

Then move on to your spending. Since you now have month-end and year-end statements arriving from your bank or credit union, there’s no time like the present to see where your money went in 2014.

2. Set your goals

You can’t hit a target that you can’t see. Once you’ve figured out where you are physically and financially, decide where you want to be (and by when). Write down that goal and keep it in a prominent place.

Your physical goals are probably easier to identity. Pick a weight you would like to reach within a certain time frame. Be reasonable and easy on yourself by limiting your would-be weight loss to about a pound a week.

You might also pick an athletic event in the future that you would like to enter (and complete), such as a 5k race in the spring.

Your financial objectives can be near-term and mundane, such as, “I will only spend $40 per week on non-essential items.” Or they can be big and long-term, as in, “I will save 10% of my gross earnings in to my retirement plan at work.”

3. Track your actions

The third step toward reaching your goals is to ensure that your everyday choices don’t derail you off your path.

Yes, there are dozens of tools and tricks to monitor what you’re eating and spending. But the simplest method is to pick up a small notebook, and jot down every time something goes in your mouth or out of your wallet.

Better yet, add in each time you exercise, describing what you did and for how long you were able to sustain the activity.

You should also give yourself a weekly weigh-in on the aforementioned scale, with a page in your notebook devoted to the date and weight provided at each measurement.

At a minimum, you will become more conscious of where your calories are coming from, and where your dollars are going. Hopefully, that knowledge will cause you to think twice before doing something that your wallet or waistline might regret later.

But ideally, your diligent record-keeping will show that you may be eating and spending more and exercising less than you estimated, all of which contribute to the need for these resolutions in the first place.

4. Small steps + time = Big difference

Sadly, even the most disciplined regimen won’t provide a rapid increase in wealth or decrease in weight loss.

But if you start with a smart plan and stick to it for the next 30 days, you should notice enough improvement to motivate you for the rest of the year.

To help you stay on track, we’ll spend the rest of this month giving you more information on the ways you can make your weight go down while you’re wealth goes up.