This Sunday, I'll be joining Olympic gold medalist, Deena Kastor, and about 23,000 of my closest friends for the L.A. Marathon -- a race I look forward to every year, yet never adequately prepare to run. I'm not sure why I can never stick to my training schedule -- or more importantly, why I still choose to put my body through the agony of finishing despite this fact -- but at least when it comes to my money, I don't follow the same pattern.
The similarities between distance running and money management are astounding when you think about it: The planning, the patience, the determination. Of course, if you're skilled at one, that doesn't necessarily mean you're also good at the other. And luckily, I don't manage my finances the same way I "train" for marathons, or I'd be broke and living out of a cardboard box by now.
So whether you regularly knock out 26.2 mile races, or just the thought of running puts you in a sweat, here's how you can apply the principles of marathon training to your financial life and come out a winner.
1. Create a Long-Term Plan and Stick to It
Going into any situation unprepared is rarely a good idea, but when it comes to activities like running a marathon or saving money, setting a concrete goal and following a long-term approach to reaching it is truly the key to success.
Personal finance author Danny Kofke put it to me simply, "If you do not have a plan or map on how to get somewhere, it is impossible to get there!"
However, having the determination to stick to your plan is often the most difficult part in reaching a goal. It also happens to be the most important. And let's just say the longest distance I've run this year was a half marathon in January.
Whether your main financial priority is growing your savings account, paying off debt, or buying a house, the chances of actually reaching that goal increase tremendously if you have a detailed plan of action and follow it consistently.
Everyone hits roadblocks, screws up, and gets tired; it's whether or not you choose to overcome these setbacks and keep chugging along that determines success.
I may have skipped a few too many training runs in favor of a social gatherings or nap time on the couch. That's evidence of poor prioritization, which will undoubtedly throw you off your financial plan, too.
Reaching a goal, especially an aggressive one, requires prioritizing that goal above everything else and making sacrifices every now and then. Maybe that means cutting your entertainment budget to save up for a home down payment, or not buying anything new until your credit card balance is paid off. It's not always fun, but keeping your priorities in check will keep you on track to accomplish your goal in the time frame allotted.
3. Track Progress
Certified financial planner and managing director of Gregory & Company, Gregory P. Alerte, tells me that when it comes to money management, you can't just sit back and wait for results to happen. "Like getting physically healthy in order to see positive results, in your financial health you'll need to be proactive. Don't take a relaxed, 'laissez-faire' approach to your financial life," he advises.
So how does one remain proactive? It starts with documenting your progress to not only celebrate improvements, but also identify areas of concern before they blow up into big problems. While I hate budgets, I do believe in tracking everything for this very reason.
Like runners often track weekly miles, nutrition, and weight to ensure extra pounds don't sneak up and throw off their training, you should be tracking your income, expenditures, and any other factors important to your situation to catch potential issues like overspending or suspicious fees.
4. Fine-Tune Periodically
If there's one thing that's certain in every area of life, it's that things change. The second step in being proactive is periodically reviewing your plan and making any necessary tweaks to accommodate arising needs or gaps. The longer-term your goal, the more important this step becomes.
Just as I might reduce weekly mileage because I feel a twinge of pain in my knee, you might switch banks because yours raised its fees.
But even if change isn't so obvious, your finances can always use an occasional once-over to ensure everything is going according to plan.
5. Live Within Your Means
I'm not going out on Sunday morning expecting to clock six-minute miles. I know what my body can handle given my training over the past few months, and don't plan on going down in flames at mile 12 because I couldn't be honest with myself. In fact, that's probably the one thing I'm doing right.
The same idea goes for your finances. Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network, says, "Take responsibility and choose where your money goes, instead of being influenced by whims, advertising, habits or peer pressure."
Sure, you can live like Beyonce on a Toni Braxton budget, but you'll burn out at some point -- and it won't be pretty. An important principle in maintaining a healthy financial life is accepting your current situation and living within your means. You can always set goals to improve your financial position, whether that's by earning more money, making smarter investments, or paying off high-interest debt, but it begins by making smart, realistic choices using what you have today.
In essence, sound money management is a marathon. But it lasts a whole lot longer than four hours, so you'd better be prepared. Hopefully, I will be next March.