Celebrating the milestones

Question: I get it. Long-term plans give us direction when it comes to perso­nal finance. But what will

help us stay the course when it precisely takes a long time to achieve our financial goals? Asked at “Ask a Friend, Ask Efren” free service at www.personalfinance.ph, SMS, Viber, Twitter, LinkedIn, WhatsApp, Instagram and Facebook

Answer: It was a few months ago when I saw a stolen shot of my profile. I looked nine months pregnant. It was at that time that I vowed to trim the fat.

We buy exercise equipment to no avail. The last one we bought was a powered treadmill, which we found out to our dismay was only good for one thing (at least for us) and that was for drying towers using the handles.

I like numbers. But I would call myself only a pseudo nerd. And just like the next guy, I like the fruits of my labor blossom in front of my very eyes in the shortest time possible. So, armed with these two traits and the excuse of my wife’s birthday, I bought each of us inexpensive smartwatches that could track our steps, sleep patterns, pulse rate and blood oxygen levels. Oh, they do also tell the time and date.

Next, after some research on how many steps it would take to lose weight, I set out to take 10,000 steps a day inside my home (due to the lockdown). Like all worthy endeavors, it was not easy at first. But having that numeric target challenged me.

That target of 10,000 steps looked daunting. However, I found that one round inside my house would amount to 120 steps and that doing five of those would already accomplish 600. Two of those five rounds would already equate to 12 percent of my target. These easier milestones gave me the “highs” I needed to make my daily routine sustainable. And before I knew it, my smartwatch would already be telling me that I had reached 10,000 steps.

Many years earlier, we bought an inexpensive weighing scale that measures and tracks body mass index, percentage body fat, percentage muscle, visceral fat, resting metabolic rate and body age in addition to weight. I also used these metrics as milestones to keep me driven in my quest not only to lose weight but to likewise stay healthy. Of course, I also followed a healthy diet, making sure that I burned more calories than I consumed.

And improve I did. After nearly three months of my 10,000 daily steps routine, my weight is down by 10 pounds. For my age, my percentage body fat is now that of an athlete, and my body age is now younger by 5 years. My visceral fat is 2 points lower while my percentage muscle is climbing. There are still metrics to improve on and maintain. But these are the very same metrics that will motivate me to soldier on.

So, where is this story leading? It is all about the easier milestones that you need to set up to make working on your long-term goals more sustainable. Achieving these milestones helps release dopamine in our brain, the pleasure chemical, that powers us to continue on our journey. For personal finance milestones, I recommend creating them around the EnRich CD-RW management pillars. CD-RW stand for cash, debt, risk and wealth management.

Here are just some examples of EnRich CD-RW management goals: a) Trying to increasingly live on 80 percent of your income; b) ensuring that the monthly repayment of all your debt is brought down to and kept at a max of 36 percent of your household income; c) buying enough life and health insurance coverage while contracting sufficient health maintenance coverage, and d) engaging in wise and periodic investing.

The tactics you develop to achieve those goals will serve as your milestones like not overly populating the “add to cart” on your favorite online shopping app, using debt more to acquire earning assets rather than to consume, drilling down on insurance coverage offers to choose one that is appropriate for you, and determining the right amount of periodic savings and investment in the outlet that is suitable for you. These tactics will help you erect short-term (i.e. yearly, semi-annual, or monthly) metrics that when surpassed will give you the highs and motivate you to soldier on.

Challenges were aplenty in 2020. But you will not be outdone in 2021. Celebrate milestones to see that the path can be easy. Do stay safe and stay healthy in the year to be wealthy.

Efren Ll. Cruz is a registered financial planner of RFP Philippines, seasoned investment adviser, bestselling author of personal finance books in the Philippines. Become a Yaman Coach. For details, email [email protected]. To learn more about personal financial planning, attend the 87th RFP Program this January 2021. To inquire, email [email protected] or text at 0917-6248110