Applying Financial Principles and Meetting Financial Goals

I discuss many personal finance principles in the Financial Guide To Life (FGTL) like reaching financial goals, but sometimes discussing theory can seem more theoretical than practical, or just too hard to actually do, like the latest diet trend.  So today’s post will be about applying financial principles and advice to a real life example — buying my Fitbit health tracker.

Several members of my extended family had bought one and routinely discussed them, compared their exercise stats, and recommended them.  Eventually, I decided they sounded worthwhile as an exercise incentive and decided to buy one, too.  But I didn’t rush right out and buy the first one I found, since a regular reader will know that one of my main principles at FGTL is to “avoid paying full price”.  One of the best ways to avoid paying full price is to look for sales, and I knew that Black Friday would be coming soon.  Black Friday is the day after Thanksgiving in the U.S. when retailers start their pre-Christmas sales in a big way.

Look for Sales

This would be a simple way to find a sale, assuming the Fitbit would be included in some retailer’s sale.  This means starting with research which I always recommend is step one in a major purchase, and the internet makes almost any research much easier.  My research quickly narrowed my choices to a particular Fitbit model with the features right for me and revealed that several retailers planned to include it among their Black Friday sales.

Research Options

When the Black Friday sales arrived, my additional research revealed that several retailers sold it for the same sale price, so step two is deciding which retailer offers the best deal.  This means looking for additional ways to save, specifically, checking for promo codes, free shipping, coupons, rebates, and rewards point.  I chose the retailor that I earned reward points at, offered free shipping, and had a rebate thru ebates.com.  Of course I used a credit card that provided rewards points.  So imagine how much better I felt knowing that I had bought my new gadget at less than full price by delaying my purchase until it was on sale, doing my research, and finding extra ways to get money back.

Financial Implications

However, that is not the end of my financial story as so many of our daily decisions have financial implications and affect our financial goals.  A fitness tracker is a bit of a luxury.  They cost more than most watches, but they also provide more than most watches, namely notification alerts when your smartphone receives telephone calls and texts, plus a wealth of health statistics like steps taken, distance walked, floors climbed, and other information.  Yet, the biggest benefit is the incentive to get more exercise.  It provides incentives several ways.

Set Your Exercise Goals

The first step, similar to so many of life’s endeavors financial and otherwise, is to set your goals; how many steps do I want to walk, how many floors to climb, or how many calories do I want to burn each day?  Then the fitness tracker provides easy ways to get data as to how well you are meeting your goals.  It provides your personal data directly on the tracker, on a smartphone app, or on any web browser.  So if you are not meeting your exercise goals, you have some feedback and incentive to get up from that desk chair or couch and walk some more.

Share a Goal

Moreover, it builds upon a well-known fact that sharing a goal publicly makes it more likely that we will take the necessary steps to meet it.  Fitbit enables you to “friend” your family and friends that also use a Fitbit, so people can see their friends’ progress and they can see yours – giving you more incentive to actually meet your goals.  This has worked for me.  This reminds me to get up from my desk every hour or two and take a few laps around my house, office building, or block. This has now become routine and my eyes, neck, back, and bottom appreciate the breaks as much as my heart benefits from the exercise.  When I know that I’m short of my 100,000 steps for the week and my Fitbit friends will see my slacking, I go for another walk.

We can use these same goal-setting and goal-sharing principles in our financial lives.  Explicitly set a financial goal such as save “X” amount for “XYZ”, reduce my credit card debt by “X” amount, or cut back my spending on “XYZ” to “X” by this date.  Next have an easy way to monitor your progress; there is probably a smartphone app for that.  Finally, share your goal with a friend or family member for the extra incentive to make progress – or avoid failure.  You may even want to reward yourself with mini-treats for making milestones or incentivizing yourself by foregoing treats for missed deadlines or contributing money to a cause or political party you dislike for failures to meet milestones.

Your Health Affects Your Financial Goals

Here is one final illustration that so many aspects of your daily decisions have financial ramifications.  Remember that bad health is very expensive (among other things) and good health will save you big expenses (among other things).  So the fitness tracker does cost money in the short term, but is a tool to help save me big money in the long term (among other things).  It helps me set exercise goals, monitor my progress, share my goals publicly with friends, and incentivize me to meet my goals for long-term benefits.

Try it with a financial goal of your own.

About John Kimball

Over the past few decades, I have experienced most of these financial issues with both mistakes and successes. I sure wish someone had told me these things when I was first starting out. So many times I have cried out, “I want a do over!” when I learned a new financial lesson or tip. I aim to pass along to you the financial insights I have gained from experience, reading, analysis, and living the financial aspects of managing, saving, investing, and spending your money. I am an analyst with a large organization and happily married with two children on their way to an expensive college, no doubt. I read numerous financial blogs, websites, newsletters, magazines, newspapers, and books to bring you the latest news, insights, tips, and lessons combined with decades of experience.

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