Becoming Financially Fit

Alerus shares its best tips to keep your finances in shape.

Are You Financially Fit?

The New Year provides a great opportunity to pause, take stock in your position in life, and reassess your goals. For many of us, this means making resolutions. The most common New Year’s resolutions address physical fitness – exercising more, losing weight, or maybe even signing up to run that first marathon. Money-related resolutions also rank high in popularity and often focus on one specific goal, like building up a savings account.

“Setting attainable financial goals is important, and should be incorporated into your daily life. But holistic financial fitness is critical in achieving and maintaining long-term financial wellness,” says Paul Dadlez, lead financial advisor at Alerus.

“Financial health is arguably just as important as physical health, and should be treated as such,” Dadlez says. “If you have unhealthy eating habits and never exercise, you aren’t going to get into shape by doing a few sit-ups every day and not altering any other part of your routine. Sit-ups are a great start, but they are just one part of the bigger physical fitness picture. Financial fitness can be viewed the same way. Saving is great. Budgeting, investing, and managing wealth are wonderful. But if you are working toward true financial fitness, consider all of the financial components of your life, your goals, and then plan your journey to get there.”

If it sounds complicated, don’t worry. It doesn’t have to be. Just like physical fitness, the hardest part of financial fitness is getting started.

Make Financial Fitness a Family Affair

It’s surprising how little families talk about financial matters, particularly when financial issues are a top cause of stress and dissent among them. “Money is a taboo subject for many families,” says Dadlez. “This can lead to a lack of awareness and missed expectations. By working with an expert to plan ahead and being transparent with your family about finances and goals, it is possible to avoid many issues.”

If this sounds familiar, make 2021 the year you change your family’s approach to discussing money at home. Here are a few tips to get started:

·       Break the taboos. Every child picks up their financial habits from their parents. You don’t have to broadcast your monthly earnings, but make sure they know how money works and explain what it means to borrow and invest money. Even young children can grasp the basics when they are exposed to them. These early lessons make later conversations easier, and start them on the right path toward their own financial fitness.

·       Involve everyone in decision making. Having a hand in financial matters leads to respect for money. Many parents opt to provide their children with allowances to enable independent money-making decisions, but there are other opportunities for family involvement as well. Consider sharing the potential cost and consequences for vacation choices, for example, and giving children the chance to weigh on.

·       Discuss what’s important. Money is not the end goal – but what it can be used for is. What you save for and who you give to shows what you value. Connect money to your family’s values by talking about what you donate to and why. You might even let your kids choose a charity to provide first-hand experience in identifying a cause or project they support and reaping the gratification of putting their money toward it.

Utilize Trusted Guidance

Whether you are planning for the short- or long-term, an experienced financial guide can help you devise a plan to meet specific goals. Maybe you want to pass money down or have it available to give away. You may be dreaming of a specific goal but don’t quite know the best way to use your resources to achieve it, or perhaps your goal for 2021 is simply to establish some goals. A financial advisor can show you ways to grow and use wealth that best reflects your motivations and values. Chances are they have worked with others who were in similar situations and can point out trends and opportunities that you might otherwise miss. Financial decisions can come with a host of legal and tax-related questions. Having a financial advisor in your corner means you can quickly connect with the right experts for answers.

Like taking inventory on your health to set attainable fitness goals, evaluating your finances and involving those it concerns in discussion can help make getting your finances in shape achievable. Of course, setting short-term financial goals is important. But by considering the major components of your finances, and setting goals based on them, you are building the foundation for long-term financial stability. Take the opportunity of a fresh start that the New Year offers and make financial fitness a resolution in 2021.

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