Training towards financial fitness

These past few months have been tough for all, but out of adversity there are often glimmers of hope. Here we look at what we can learn from the successful ‘Couch to 5k’, in helping people feel better about their finances.

by | Oct 6, 2020 | 0 comments

If you asked someone who rarely exercised to run 5km, they would likely tell you to “jog on”! However, you’d get a better response if you help them to realise the benefits and set small achievable goals, building them up slowly, asking them first to walk a short distance, then a slightly longer distance, then to complete a short run. It’s about showing them a meaningful end goal, and a path of progress in conquerable steps. There’s a lesson here for any employer that cares about the financial wellbeing of their workforce – in fact, there are several. So let’s look at the five lessons the ‘Couch to 5k Challenge’ can teach us about personal finances.
We’ve already started this one so I’ll just complete the comparison: if you told someone with no money they’d need to save £5k, it would seem unachievable. But if you could show them little ways that they could build up to that £5k, and what they could do with that money (even if simply security or peace of mind)…within a realistic timeframe, you’d get the same effect as the Couch to 5k. Even if your motivation is to feel comfortable (security) as opposed to running a marathon – the goal is no less valid.
A ‘Couch to 5k’ will often involve eating healthily, which usually involves avoiding temptation from the biscuit cupboard. Whilst for many, biscuits will be a luxury, the importance of a positive mindset and a goal behind avoiding temptation into bad habits is really important. Similarly, a financial plan means thinking about what we can avoid spending money on to help us reach goals that are meaningful for us to be happy, healthy and reduce stress. The current global health crisis, for all the worries and tragedies it has brought with it, has presented a unique opportunity for us to cut out the unnecessary items. Is that because we’ve learnt to cope without certain things over the 12 weeks of lockdown, shopping more for ‘needs’ than for ‘wants’? Maybe now is a good time to be asking ourselves what could we continue to cope without now that we’re coming out of lockdown, that perhaps is not as ‘essential’ as we always believed? After all, we’ve already done the hard work. One expert, psychologist Dr Maxwell Maltz, famously claimed it took “21 days to break a habit”. Whether this is true or not, it’s certainly possible we’ve ditched some spending habits over those 12 weeks. Don’t leave it until later, take action now, and get it down on paper so you can visualise what to do next.
It’s not wise to wait for a health issue before we make lifestyle changes. Same with our finances – a plan is needed from the start. When you make a fitness plan, you usually start by thinking about where you are now and where you want to be. A financial healthcheck involves looking at your current incomings and outgoings. Next, look at what you can change… and remember: take baby steps. Is it necessary to have four pints after work on a Friday or could you cope with two? Do you really need Amazon Prime, Satellite TV, and Netflix? Maybe all these things are important to you – what makes you happy, but also what would make you healthier financially? Never cut too quickly. If you were consuming 15 spoons of sugar a day and you went suddenly to nothing, your body would scream out for it and you’d abandon the health kick. It’s the same with trimming your budget. You are far more likely to achieve if you play the long game – the lifestyle change.
Our health and fitness plans usually have a purpose, even if we don’t write it down. This could be to just feel more healthy, or maybe to have more energy, to feel more alert, or be more productive at work. The same should apply in our finances: the incremental steps we take to improve our bank balances should be linked to the real goals – like arranging a wedding, taking the family on holiday or moving house. This also helps us avoid squandering the self-improvement we make on our journey to financial fitness. This lesson is particularly urgent for people who are currently furloughed or on less pay because their employer, business or freelancing has suffered in the pandemic.
Employers can also be advisers or mentors when the task is to get their people thinking about their goals, their plan, their strategy. That then frames their personal financial management in terms of targets, incremental steps and rewards in a set timeframe. No one wants a mortgage – they want a home, they don’t want to hide £100 a month away – they want a holiday, they don’t want to pay into a pension – they want to retire at the right time on the right money. Thinking about financial wellbeing as a key element of an employee benefit scheme is a key pillar in support of improved mental health overall – think ongoing fitness plan as opposed to bootcamp of a one-off hit workout! Any employer who understands the ambitions of their staff is key in supporting diverse communities, especially when pay rises are probably on hold for the foreseeable future in many organisations, and many continue to work remotely. Employees are more likely to trust their employer to help them gain control over their personal financial situation than a financial adviser. It might involve your managers talking to their teams, or bringing in expert support, or just giving staff the tools to improve their situations What’s certain is that having a good view of the current situation, a set of goals and rewards, and a journey of baby steps towards them, will get people coming to work with purpose. And when people have a purpose at work, they have even more reason to perform. And to do so with a positive, healthy mindset.

*Millenium Cohort Study, 2016, University College London


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