5 New Year's Reality Checks for Your Health and Wealth

For many people, a new year represents an opportunity to dedicate time and energy to getting physically fit. For others, the prime focus of their self-improvement efforts will be their finances. And Ellie Kay and Danna Demetre, co-authors of "Lean Body, Fat Wallet," say the principles and habits that can help you lose weight and gain a healthier body are the same as the ones that could lead you to financial security.

Here are five reality checks to help you identify your financial problem areas and tackle them head-on in 2014.

1. Try on your fiscal "bathing suit," and shine a bright light on your full credit picture. Demetre says a great reality check before you indulge in a high-calorie treat is to try on your bathing suit and decide if you're where you want to be with your weight. If not, she says, keep that image of yourself in the mirror in mind when you're about to go out to eat.

Similarly, getting an accurate picture of your credit history is the first step in keeping your borrowing and spending in check. Checking your credit report will give you a true-to-life picture of where you're at right now. Kay recommends getting credit reports from all three bureaus (Experian, TransUnion, and Equifax) at annualcreditreport.com to see all of your debt in one place.

2.Step on the "scale," and see how much you're paying in interest. Your scale gives you an instant answer about how much you weigh, and how far you are from what you see as your ideal weight. Yet most of us are in the dark about how much our debts really weigh. "This is usually the single biggest shocker that gets consumers to change their spending habits," says Mike Warren, a personal finance expert and author of "Guerrilla Credit."

Warren offers step-by-step directions on how to weigh your debt burdens: "When you get your 1098s from your mortgage lender and student loan companies, add those [the interest portion of your payment] together. Now add in interest paid on such things as car loans, installment loans, and credit cards. If you happen to have taken out a payday loan, pawnshop loan, or even title loans, then add that as part of it as well. Once you have the total, divide that number by 365. That is how much you are paying every single day in interest alone to some bank or other institution that could be going into your savings or investment accounts."

3. Target "fat," not "muscle," by calculating your debt-to-income ratio. Not all extra pounds are equal. The goal of proper diet and exercise is to lose fat, not muscle. The same goes for trimming down debt -- some debt is bad (the flab) and some is structurally necessary and beneficial (the muscle).

%VIRTUAL-article-sponsoredlinks%"Some debt, like mortgage debt, can be deductible for tax purposes ... and student loan debt can help you build greater wealth over time," says Warren. Bad debt doesn't have any beneficial characteristics. "I'm talking about credit cards, store/merchant cards, title loan companies, pawnshop loans, and even payday loans."

Add up all of your bad debt and divide that number by your total income. Warren says that a debt-to-income ratio of 6 percent or less that you are actively paying down is a sign that you're on the right track. "If it's any higher, you need to get serious about knocking out this debt," he says.

It's important to come up with a formal play for debt payoff. "Use a credit card payoff calculator so you can see how long it will take to pay off your credit card debt if you only make the minimum payment," Kay says. (Check out this debt payoff calculator at Bankrate.com.) "Then start tackling those debts one at a time. As soon as you've paid off one, you can double up your payments on the next."

4. Count calories and pennies. "I'm against strict diets, but people need a reality check on what they're really consuming," says Demetre. "Just keep track for a week or two and use a device like a Fitbit to monitor your activity level. People have no idea that you can gain 20 pounds in one year if you consistently consume 200 extra calories a day."

Just as you need to count calories and monitor your activities to see what you have coming in and going out, you need to track your income and expenses, says Kay.

Warren recommends tracking your spending to the penny for 30 days. "You'll be amazed at how easily the money slips through your fingers," he says. "So create a budget and figure out what you can spend money on and what you can't. Then stick with it."

5. Check on your long-term financial health. Any exercise you do now has long-term benefits for your future health. The same goes for retirement savings. For employees with a 401(k), Rob Jupille, president of RTJ Financial Management, recommends that you check your first pay stub in December to ensure you've maximized your contribution. That way you can make any adjustments for the next pay period so that you start the year setting aside the correct amount.

When it comes to exercise, an expensive gym membership doesn't get you a better workout than you could get at your local Y. Same goes with investments. High fees are not the mark of high quality, which is why it's important to review your investment costs and see if there are cheaper alternatives.

"If you hold mutual funds, specifically ask your broker what the expense ratios are for each of your holdings," says Guy Penn, principal and founder of G. M. Penn Wealth Management. Review your investment costs. "Find out exactly what you are paying in commissions. Always keep asking, 'Can we get the same results at a lower cost?' Eliminate any hidden expenses that can erode your investment gains over time."

The Best Plan Is One That You'll Follow

Whether you're watching your weight or your bottom line, Demetre and Kay say you have to develop a sustainable, realistic plan. "You have to ask yourself if your plan is something you can stick with on most days for the rest of your life," says Demetre.

Fight against the "all or nothing" concept, she says, and take small steps beginning right now rather than going on a crash diet or savings binge. "It can't be something you stop after 10 days. It takes 21 days for a habit to become ingrained, so it's important to be realistic about your eating and exercise from the beginning."

Kay says the same advice applies when you establish your budget. "You can't base your budget on never eating out because you'll set yourself up for failure," says Kay. "But maybe you can cut it back to once a week or twice a month or choose less costly meals."

Kay and Demetre recommend having an accountability buddy, someone you can share your goals with who will help you stick to your plan. If you need to eat less or spend less, it always helps to share your frustration -- and your triumphant moments.

Michele Lerner is a Motley Fool contributing writer.