Thursday, January 13, 2022

Managing Your Mindset with Manifestation

Lately, lots of popular media sources have been talking about the power of manifestation. While it may sound unreal, this idea is actually founded on neuroscience. Apple News shared an article that includes interviews with doctors about how manifesting actually works.

According to Daniel G. Amen, MD, a clinical neuroscientist and psychiatrist, manifestation is a proven way to help you “match your behavior to your goals.” He shared that “focusing on your goals sparks brain activity, especially in the prefrontal cortex, the region of the brain involved in planning, forethought, and follow-through.” By focusing more on what you’re working toward, your brain subconsciously begins to plan and look for opportunities to be successful. 

Managing your mind is an important step to being successful with any goal. Not only do you become more open to and aware of opportunities, but you also are more likely to take the right actions. Even if you are doing “all the right things” to reach your goal, your mindset will still affect your results. Let me give an example.

Say you want to start your own business, and you’re “doing everything right.” By that I mean, you’ve found your suppliers, you hired good people, your product is of good quality, and you made a good marketing plan. Even in this case, if you don’t believe you can be successful or you have any doubt about your business, you will subconsciously hint at this doubt in every company action. It will be passed from you to your team, and then to your customers, and it will become difficult to make sales. 

If you don’t believe in yourself, you will subconsciously convince others in subtle ways not to believe in you either. This goes for work as well. If you aren’t confident in your position, you probably won’t get a raise, even when you’re doing good work.

Working to manifest a healthy mindset about your goals will help you align your actions and intentions to be more effective. That way when you’re “doing all the right things” to work on your goals, you’ll also be sending yourself and others “all the right ideas” about your hard work.

Financially Fit is committed to educating individuals about financial wellness. Along with this blog, we offer financial tools to help you take control of your life on our website. Check out the demo (no personal information required) for more information.

Here to help,
Your Financially Fit Team

Thursday, January 6, 2022

4 Financial Wellness Tips from a Harvard- Trained Economist

CNBC published an article this week that shares 21 financial tips from a Harvard-trained economist. Here are our four favorites and why they will help you better your financial health.

1. Invest in debt repayment first! This includes your mortgage.

Say you have $100,000 that you can invest right now. 

a. If you invest it in a bond earning 1.5%, you’d earn 1,500 in interest income over the course of a year.

b. If you instead had a $100,000 morgage at a 3.2% interest rate, you’d save $3,200 by paying it off and avoiding a year’s worth of interest payments. 

In short, you’d make $1,700 with no risk by investing in your debt instead of in a bond.

2. Use retirement-account contributions, conversions, and withdrawals to cut your lifetime taxes. 

By contributing to your retirement accounts, you save the money you need for your future, receive tax benefits, and can often receive contributions from your employer as well. Understanding your company’s retirement benefits is an important step in this. If you need help understanding the different types of retirement accounts and what is best for you, feel free to schedule an appointment with one of our coaches for personalized guidance.

3. If you don’t formally request your social security benefits, you won’t get it.

Many people don’t know this, and it’s important to plan ahead. You actually have to actually file for benefits once you’re eligible. This can be done through the Social Security Administration’s website.

Another key tip is that if you can wait until age 70 to claim these benefits, your monthly benefits increase significantly. Of course, this isn’t an option for everyone, but consider it before applying.

4. If you want to invest in stocks but are worried about the risk, don’t add more money to your trading account until you are able to pull winnings out.

There are lots of things to learn when you begin investing, but the first things are: 

a. How much money am I willing to “spend” as I learn about the stock market?

- by investing before you know what you’re doing, you will likely lose some of it. Just consider that the cost of self-education. It will get better as you learn to do the proper research and understand the market better.

b. What is my exit strategy?

- If the stock you buy is doing well, it is sometimes hard to sell it because it may continue to go up. If you sell to early, you lose out on profit you could have made, but if you sell too late, then you could lose out anyways. Building an exit strategy means understanding what the stock is likely to do and deciding at what price or % increase you’ll sell part of the stock.

A basic example:
You buy 200 shares of a stock that will probably go up 10%. It has the potential, though, for a 15% increase.

Your exit strategy could look like this:

- At 5% increase: Sell 40 shares

In case the stock doesn’t do what is expected, you make a little and could sell the rest if need be.

- At 8% increase: sell 80 shares
Here the stock is trending as expected but it may not reach its full potential so selling a little over half guarantees some winnings in case it begins trending down.

- At 10% increase: Sell 40 shares

Now the stock has done what was expected. While it could go up, the future is uncertain, and selling a bit more will help mitigate any potential loss from a dip.

- Hold the last 40 shares in case the stock does better than expected and sell if it turns down.

This isn’t the perfect plan for every situation, but it allows you to see the thought process behind mitigating risk with an exit strategy. Here you can see if the stock were to fall at any point, you’d have made some money and could sell the rest of your holdings if needed. 

To read all 21 tips, see the full original article here.

If you need help with any of these concepts, feel free to reach out. Financially Fit is here to help individuals like you better your financial health and overall quality of living. We also offer many financial tools, like budgeting and debt reduction worksheets to get you started. See our website for more information.

Here to help,

Your Financially Fit Team

Friday, December 31, 2021

New Year, New Goals: How To Stick To Your 2022 Resolutions

Because it’s New Year's Eve, let's talk about New Year's resolutions. Setting goals is a great way to plan your future and grow. However, trying to change too much at once tends to result in failure, and that’s usually what happens with New Year's resolutions. People create a laundry list of every way they want to be different and everything they think they should be doing. Then we all assume that the magic of January first will help us keep up with all of these big changes. 

Here’s the thing though. January first isn’t a magical day. It’s just another tomorrow, and you aren’t going to wake up as a whole new you with different habits than what you have now. 

If you don’t already exercise every day, you aren’t going to have the motivation or time just because the calendar changed.

If you don’t already save money each month you aren’t going to start by saving 1000$ a month consistently just because you want to. You have to start by consistently making and keeping to a budget. Then you can save smaller and more realistic amounts consistently, based on your budget. Then when you know you can save 100$ a month regularly and you’re comfortable budgeting, you can keep bumping that number higher.

If you haven’t picked it up yet, the key to making New Year's resolutions work is to take baby steps. Set goals that are so small that you know you can keep them. This teaches your brain to be consistent with a totally new habit. Then after doing it for a month or two, you revise the goal as you feel fit to do a little more.

People always overestimate what they can do in a day and underestimate what they can do in a year so start small. Learn consistency with a small new habit, and you’ll be able to reach your end goal in time.

Here to help, 
Your Financially Fit Team

Wednesday, December 15, 2021

Are you experiencing burnout? Here's what you can do.

Most people have experienced some form of burnout at some time or another. Even the most passionate employees struggle with burnout. According to a Deloitte survey, 87% of employees reported being passionate about their work, but 64% are frequently stressed. If you are experiencing this type of fatigue, you are not alone and there are things that can help. This article is here to help educate you about what burnout is, how to recognize it in yourself, and what to do about it. 

Because burnout is becoming increasingly common in the workplace, the World Health Organization has actually recognized burnout’s impact on health. WHO defined it as a syndrome that results “from chronic workplace stress that has not been successfully managed.” 

Burnout is often characterized by visible signs, such as:

  1. mental and physical exhaustion
  2. uncharacteristic disengagement or boredom at work
  3. reduced productivity
  4. cynicism or complaining related to one’s job

For any of these things, be it tiredness or frustration, it is normal and expected to have off days. However, if you notice you are experiencing an extended period of one or more of the above symptoms, there is likely a bigger issue to address. 

This is where you should take an inventory of yourself. 

While these symptoms are all key signs of burnout, there is also a chance that the cause is not work-related. Sometimes rough situations in our personal lives, like sick family members or financial stress, can affect our feelings and behavior at work. If there are personal issues at hand, consider talking openly with your supervisor so you can have the help you need to continue being successful at work. Also, consider reaching out to someone you trust who can help you manage your stressors. 

If after self-evaluation, the stress you are experiencing is work-related, try to pinpoint what is causing it. 

  • Do you have too much on your plate? 
  • Do you have a clear understanding of what is expected and what you should be doing? 
  • Are you feeling underappreciated? 
  • Are you having issues communicating with other team members?

Management Supported Solutions:

  1. Talk to your supervisor openly.
    • Once you understand what is causing you to feel burnt out at work, it is easier to have a productive conversation about how to fix it. You can talk with your supervisor about what you’re feeling, why you think you’re feeling that way, and what can be done to help you be more successful at work. Often, this kind of open communication is effective for getting the support that you need.
  2. Ask to switch up the kind of work you are doing.
    • If you usually work with data or numbers, ask if there is a more creative project you can help on. If you usually work with the most difficult clients, ask to manage a smaller/easier account so you can stay productive and have a little rest. These kinds of big work changes can help you feel more interested and engaged during periods of burnout.

Self-Oriented Solutions:

  1. Learn what techniques help you manage various types of stress.
    • There are many stress management techniques, from breathing strategies to grounding techniques. There is also counseling for more serious situations. Regardless of what you are dealing with, learning stress management techniques can help you to feel higher satisfaction in all areas of life.
  2. Spend time outside and/or exercising.
    • Getting fresh air and some sunshine can make a big difference when you spend most of your day inside. Exercising also can be a game-changer. Both of these things cause your brain to release positive hormones that will help you feel happier overall.
  3. Make sure you take your time away from work AWAY from work.
    • Don’t check work emails on your off time if they aren’t urgent. Don’t worry about things at work that you have to do if you aren’t there and can’t work on them. Make sure that your time is YOUR time so that you get the mental rest you need to be fully present at work.

Thursday, December 9, 2021

Inflation Made Easy

Before you get overwhelmed, know that inflation is very confusing for lots of people! You aren’t alone in trying to ignore it, but that won’t help your finances. Understanding inflation can help you make sure you’re taking the appropriate steps with your finances. Here is a brief introduction to inflation and how it affects your life.

Inflation, in its most basic form, is the idea that the government adds money into the economy and that adding money dilutes the value of the dollar.

This often causes prices to rise over time. Goods and services, like bread, for example, have the same value they always had but the money you are paying with is worth less than it used to be. It’s like pouring water into juice. At first, it looks like there is just more juice, but then you try it and the juice is lower quality. While inflation means there is more money circulating in the economy, each dollar is worth less than what a dollar used to be. Thus, it takes more dollars to buy the same goods.

Now, a quick history lesson. In the US, the government prints money. We used to have something called the gold standard, meaning that for every dollar printed there was a dollar worth of gold in the federal reserve. At this time, the American economy basically worked like a debit card. All of the money put into the market was money the government could back up with actual gold. This standard, however, was abandoned during the Great Depression.

Now, the country switched to fiat money, which just means that the money printed is only valuable because the government says it is. There isn’t any real commodity (like gold or silver) that your dollars represent. They’re now just paper, and it’s worth something because we all agree that it is. Crazy, I know, but stay with me.

This system of fiat money allows the government to balance the economy’s needs by controlling how much money is printed. Contrary to popular belief, inflation can actually be a good thing. The US aims to have an average annual inflation rate of 2.3% because it benefits the overall economy.  In a recession, inflation is often increased to help us bounce back by increasing spending. When the economy is doing well, the inflation rate is decreased since it isn’t as needed. 

One recent example of this is the pandemic! Inflation last year was about 6.2%. Not gonna lie, this is a HIGH inflation rate, but guess why? It’s because of the stimulus checks that the government sent out. Think of how much money was added to the US economy through those. There were also a variety of COVID relief funds for schools and other businesses that factor in, as well. This high inflation rate is what helped families get through hard times.

Inflation can also be bad for consumers. Not only does it raise prices for normal goods, but it also affects your savings. Because money is worth less over time, so is your savings account. 

Right now, check how much interest you earn on your savings accounts. 

If the annual inflation rate is higher than that interest rate, you are actually “losing” money because your savings are being devalued faster than they are being increased. Because the US attempts to average at about 2.3% inflation, you want to find an account that averages 2.3% annual interest or higher to counteract this. This can also be done through investment returns or by investing your savings in things that don’t lose value like gold or government bonds.

Inflation also affects people in debt too, but we will discuss that in a future article. For now, feel free to reach out with any questions. Inflation can be a hard topic and our financial coaches are a great resource to help better understand this and help you make educated decisions. See our website for more information and who to contact.

Here to help,

Your Financially Fit Team

Tuesday, November 30, 2021

How to Make Good Decisions

James Clear is a best-selling author, speaker, and entrepreneur who focuses his work on habits, decision making, and personal growth. He has a bachelor's in Biomechanics from Denison University ad an MBA from Ohio State University. An article written by him provides interesting insight into human willpower and how to avoid making bad decisions.

James shares that “your willpower is like a muscle” and “can get fatigued when you use it over and over again.”  During a regular day, people make hundreds of decisions, and every decision we make is like doing one more squat on leg day. Throughout the day, our willpower becomes tired just as our legs would. This is often referred to as decision fatigue.

In a sense, there is a limited number of decisions that your brain can make each day before it becomes tired. This phenomenon explains why people are more likely to make impulse decisions at night. As your energy fades, you have less ability to make good decisions, so we make easy decisions instead.

In relation to our finances, this includes our ability to stick to our budget and avoid impulse purchases or decisions. If you go grocery shopping at night, you are more likely to buy things you don’t need. If you spend time on social media at night, you are likely to waste more time than you meant to on these apps. One way to help with these decisions is to decide in advance what you will do. For grocery shopping, this means sticking to a list, and for social media, it could mean setting a personal time limit. Here's a little side tip about that too - If you struggle with social media binging, many phones now offer a setting to help you limit your screen time. You set your own daily limit and your phone will remind you when this limit is reached.

If you notice yourself experiencing a lack of willpower or decision fatigue there are ways to overcome it. James suggests 5 habits (listed below) and goes into detail with each.

  1. Plan daily decisions the night before
  2. Do the most important thing first
  3. Stop making decisions. Start making commitments
  4. If you have to make good decisions later in the day, then eat something first.
  5. Simplify.

For more information on decision fatigue and how to make good decisions, refer to the full article here. Feel free to reach out if you have any questions or want help getting started on your goals.

Here to help,

Your Financially Fit Team

Sunday, November 21, 2021

Setting S.M.A.R.T. Financial Goals

Many people struggle to achieve goals because they aren’t well defined. It isn’t enough to say “I want to do more yoga” or “I want to save more money”. These ideas aren’t fully formed and don’t have a plan attached to them. What turns that dream into a goal is making it actionable. If you don’t have a plan for how to achieve your desired outcome, it isn’t really a goal at all, but a wish.

Setting SMART goals helps remove ambiguity and makes achieving the goal easier in the long run. Let’s walk through what smart goals are and an example so you can set your own. 

The examples provided will be 1) losing weight and 2) saving money.

S - Specific

When beginning your goal, try to answer the 5 Ws: 

  • What am I trying to accomplish?
    What resources (time, money, people, etc) are needed?
  • Why is it important?
  • Who else is involved? Are others doing it with me?
  • When can I regularly work on this goal?
  • Where will I work on this goal? (or where is it located?)

EXAMPLE 1: I am trying to lose weight so that my health will improve (what and why). My spouse wants to lose weight with me (who). We will do this by exercising at the gym (where) every Tuesday and Thursday evening at 5:30 when we get off of work (when).

EXAMPLE 2: I am trying to save money (what) so my wife and I (who) can afford a downpayment on a house (why). We can make a weekly budget at home every Sunday morning when we wake up (when and where).

M - Measurable 

  • How will I know my goal has been accomplished?

EXAMPLE 1: I want to lose 30 pounds - instead of "more weight" because it's easy to measure this.

EXAMPLE 2: We need to save $40,000 for a 20% downpayment on houses that have the space to meet our needs.

In both of these examples, having a specific number and a clear understanding of what is required makes the goal more focused. This way, it is clear what you're working toward and when you are done.

A - Achievable

  • Is this a realistic goal?
  • How can I achieve it?

EXAMPLE 1: I can lose 30 pounds because I would be within a healthy weight range for my height if I do so. By focusing on losing 3-4 pounds a month, my goal is more realistic and can be a sustainable change.

EXAMPLE 2: It feels far-fetched right now, but is achievable as long as we are consistent. Realistically we can save $500 a month right now, meaning it would take 80 months or 6.7 years to reach our goal. To make it more achievable we could cut some of our spending on eating out or on streaming services and put that toward savings.

R - Relevant

  • Is this a worthwhile goal?
  • Is it the right time to work toward this goal?

T - Time Frame

  • Make time-bound goals.
    • What can I do each week?
    • What can I do each month?
    • What results can I see in 6 months?
    • When do I expect to be completed with my goal?

EXAMPLE 1: I think I can realistically lose 3-4 pounds a month, so it will take 8-10 months to reach my goal.

EXAMPLE 2: Based on saving $500 a month it will take 7 years to reach our goal, but we want it to take 5 years. By cutting down streaming services and eating out we could save $680 per month and be done with our goal in 4.9 years!

Now practice setting your own goal using these 5 factors. What is something you've been wanting to make happen? Financially Fit also offers more resources on Smart Goal Setting to members under our "tools" section. Feel free to read more information or reach out with questions. Our team is here to help!