Philippine Daily Inquirer
How losing weight is like saving for retirement
After almost a year of counting calories, I finally lost all the weight I gained since I got married. I can’t help but reflect on the similarities of my weight loss journey and the process of saving for retirement.
1. Having a big paycheck is not enough. To lose weight, you can either exercise, go on a diet or do both. And while it is true that exercising alone can help you lose weight, you won’t lose anything if you end up eating more than what you burned during your exercise sessions.
Prior to going on a diet, I only focused on exercising. While it kept me from being overweight, I still had difficulty reaching my target weight.
When it comes to retirement, having a big paycheck is like exercising. Although a big paycheck allows you to spend more, you won’t have anything left for retirement if you spend everything you earn. In fact, you can even be worse off if you upgrade your lifestyle faster than the size of your paycheck.
2. Sometimes, it is easier to spend less than to earn more. The reason why exercising alone didn’t work for me was because I was totally against the idea of exercising more. This is because I already worked out four times a week, including Sundays where I run a total of 16 to 17 kilometers to burn an extra 1,000 calories!
So rather than exercise more, I had to eat less to reach my target weight.
If you already have a 72hour work week, it is much easier to cut back on expenses than to work more to increase your retirement savings. In fact, working too hard can also have negative repercussions, specifically on your health.
3. You need less to save for a comfortable retirement—if you start early. It took me a while to go on a diet because I thought I had to significantly cut back on food. I changed my diet plan and reduced my target weight loss to half a pound a week. This allowed me to still consume 1,500 calories (which is 300 more calories a day) and reach my target weight eventually.
Likewise, in savings, start early so it will be an easy walk towards your financial goal. For example, if you start saving and investing P2,000 a month at age 25, you will already have close to P6.5 million by the time you reach age 65 based on a compounded annual return of 8 percent. This is 575 percent more than the P960,000 that you will set aside over a 40year period.
If, on the other hand, you start saving and investing at age 45, even if you set aside P4,000 a month (which is also equivalent to P960,000 in 20 years), you will only have P2.3 million by age 65.
4. Track your expenses. One of the reasons why my diet worked was because I downloaded an app which allowed me to track my calorie con- sumption. This helped me stay disciplined in watching what I ate. When I already reached the upper limit of my 1,500-calorie a day allowance, I skipped dessert and snacks or just ate something light for dinner. After a while, tracking what I ate also helped me make smart food choices.
Like counting calories, tracking expenses should also help you stick to your savings and investment plan. Luckily, there are now a lot of free apps available to help you track your expenses. In fact, if you consistently spend everything you earn, tracking your expenses will help you identify areas where you can cut back without feeling deprived. Stick to a habit of living frugally. Say, skipping your handcrafted coffee in favor of much cheaper options?
Tracking your expenses should also help you resist the temptation to buy unnecessary items, like another white shirt that you don’t really need just because it was selling at 50percent off.
5. Stay disciplined. When I reached my target weight earlier this year, I decided to stop counting calories. However, one of my friends who also counts calories discouraged me against it. He said that I still needed to keep track of what I ate to ensure that the weight stays off.
When saving for retirement, it is equally easy to backslide and undo all the progress you have achieved if you lose the discipline of spending below your means and consistently setting aside a portion of what you earn for investments. In fact, you should strive to keep your lifestyle constant and set aside more for investments every time you get a pay increase so that you can grow your retirement savings faster. After all, realizing that you can retire early is much better than realizing that you need to retire later.
I hope my reflections on the similarity of weight loss and saving for retirement will help you reach your retirement goals. If I was able to reach my target weight (which I initially thought was impossible), I’m sure that you can also reach your retirement goals if you stick to the discipline of spending below your means and setting aside a portion of what you earn for investments.