How to Shape Up, Thin Down and Build Financial Muscle!

Financial Advisor Steven Girard returns with great advice to help us get in financial shape in the new year!

Steven Girard

As many of us do when facing a new year, we make resolutions to better our lives in some manner. As it seems many of these resolutions revolve around getting in shape I thought, in the spirit shedding some excess, I’d discuss some strategies for losing a couple of notches on your financial belt.

1.)    Get Moving! Like the beginning of any weight loss program we have to get up and get moving.  This means committing to being involved in your financial life and no longer allowing yourself to be a financial couch potato.  The easiest way to get out of financial shape is to become lazy about managing your finances.  By taking your eye off the ball you can quickly find yourself overcommitted to expenses , your savings dwindling and your debt rising.  So step one is to recommit.  Be aware of what you earn, (what comes in), and what you spend, (what goes out) and what you need to save for your future goals.  A good place to start would be to reread my last three contributions to the LIES That Limit blog to get things rolling:

2.)    Go On A Financial Diet. If you want to lose weight you have to watch what you eat. The same applies to your finances. Go through your checkbook and ATM receipts for the last few months. What have you spent money on? Write these expenses down. Which ones are core, monthly expenses like heat, electricity, rent or mortgage? And which were discretionary like going out to eat, entertainment, one time purchases? Set the fixed expenses aside and focus on the added financial calories. Can you alter your lifestyle in some manner to reduce expenses? Perhaps go out to dinner one or two fewer times a month, rent a movie at home instead of going to a theatre, reduce your impulse buying?  Realize that we all like, and need, to live a full life.  But try to keep the excess expenses in control and within your budget.

3.)    Get Leaner. So you have identified the added financial calories in your life and made some changes.  Now let’s get leaner.  Review the fixed cost sheet you have developed.  Are there minor changes that can made there?  For example, car and homeowners insurance is really owned to cover large events you financially would have difficulty paying for (your car is stolen or your house burns down).  It’s not meant for small occurrences and claims. Examine your deductibles.  Can you afford to increase those to the maximum?  If you have the cash on hand to pay a larger deductible then make it the highest you can. You will find your premium reduces significantly allowing you to have more monthly cash flow.  Can you alter your cable television bill?  Do you need all the channels you have?  Would it be cheaper to drop premium channels and subscribe to a service like Netflix instead?  Or worse, are you paying for services you don’t even use?  Do you have both a land line and cell phone?  Would it be cheaper to just use your cell phone?  Do you use all your cell phone minutes and exceed those on your plan and get penalized with larger monthly bills or are you paying for too many minutes?  Do this for all your bills.  Review them all in detail.  Call each company, and their competitor, to see if there are cheaper products or services they provide for what you are seeking.

4.)    Build A Plan. The way to stay fit for the rest of your life and not have to commit to the same old New Year’s resolutions every year is to build a plan you can commit to.  Identify and qualify the things you want to be and have in your life.  Establish these as goals.  Plot out what it will take monetarily to achieve these goals and what it will take you saving each month to get there. My previous blogs provide the details for constructing this plan.

5.)    Build Muscle. You’ve begun to lose weight.  You have established a personal plan of action.  Now let’s get stronger.  Establish a savings account. Build up enough cash to cover 3-6 months of your leaner monthly expenditures.  Once that is established start to save and invest your money for your longer term future goals.  At this point you have cut out excess, set aside emergency funds and have started to accumulate wealth for your future desires.  You are financially stronger for it.

6.)    Hire A Trainer. Like any exercise regimen if you need help that’s ok.  If managing your financial life is too difficult for you then hire a Financial Advisor to assist you.  Interview a handful and find the one that best meets your needs and personality.  Ask your friends for referrals.  Who do they use and are they satisfied.  Ask for references.  Do your due diligence. Like a bad trainer a bad Financial Advisor can set you back, so take your time and make sure you are fully comfortable with the one you choose.

7.)    Stay Educated. Try to keep current with what is going on in the financial world around you. There are very good websites like Yahoo Finance or MSN Money. Periodicals like the Wall Street Journal, Kiplinger’s, Smart Money are informative.  There’s financial radio programming on stations like NPR or your local news/talk station.  And, there are massive amounts of books written on financial planning and management at your library or book store.

8.)    Stay Balanced. My final bit of advice to you is to stay balanced. As I tell all of my clients we must plan for tomorrow, plan for the ongoing risks around us, but we are alive and breathing today so live for today as well. Don’t cut yourself off from the things that bring you joy now.  A solid financial life, which is part of a life well led, is all about balance.  Tighten up the budget, build a plan for tomorrow, save and invest, but also go to that movie with friends or go out to dinner with your spouse.  Just do them all in moderation.

9.)    Buy A New Belt. If you commit to doing the things above go ahead, reward yourself, go buy a new belt because you will find the old one no longer fits.

Have a very happy and prosperous New Year.

Steven B Girard is the President of Northstar Financial Companies, Inc., and the Principal of the  Registered Investment Advisor firm.  With over 18 years of financial planning experience, he believes that financial planning is the key to achieving a life lived well.  He is responsible for the development and institution of Northstar Financial Companies, Inc., its overall philosophy, and financial planning strategies.  Email:

Securities offered through Registered Representatives of Cambridge Investment Research, Member FINRA/SIPC. Advisory services offered through Northstar Financial Companies, Inc. a Registered Investment Advisor. NFC and Cambridge are not affiliated.

Northstar Financial Companies, Inc.
1100 E. Hector St. Ste 399
Conshohocken PA 19428
(800) 220-2161

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