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Building Wealth through Saving and Investing

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7 Ways Saving Money is like Losing Weight





In the past 12 months, I’ve been able to save 20% of my income and lose 20 lbs. In the process I’ve learned that there are many similarities between losing weight and saving money.

Here are 7 ways saving money is like losing weight:

1. Have a goal

Here it’s the million dollar journey. The goal is right in the title. For me it was 20 lbs. I only knew where I was going if I had a goal to strive towards. Having a goal is a great way to stay motivated when the going gets tough. I set out with both a financial goal and a goal for the number on the scale.

2. Write it All Down

I volunteer my time as a financial coach where I sit down with people and help them come up with a financial plan. This includes setting goals, getting out of debt, preparing a budget and saving for the future. One of the first assignments I give people is to begin writing down everything they spend. I track our expenses at wesabe. I track everything I eat and all exercise at fitday. Both are free.

When you write down what you spend and what you eat, it’s easier to see when and where over-spending and over-eating occur. It also provides accountability when you know later that you’re going to have to write it all down. People are often amazed to find they have spent way more than they thought in an area where they least expected it.

I’ve had several people guess they were spending $200 a month on food. When they wrote it all down, it often turned out to me more like $600 or $700. Others guess that they can’t be eating all that much until they write it down and add it up.

3. Chart your Progress.

On the first of every month I track my net worth in google spreadsheets. On the first of every week I tracked my weight. I made a little graph that showed my progress. Tracking your net worth can be really motivating for some people. It’s the same for tracking weight loss. A great deal of motivation can be found by looking at how far you’ve come!

4. Make it Automatic

Once I set up automatic monthly payments into savings, it became a lot easier to save money. I also have all of my bills automatically paid out of my chequing account each month. It’s the same for food. I eat the same breakfast every morning. Boring? No way! I chose something I liked. I also chose something with enough protein and nutrition to get me to lunch without snacking. By automating parts of my fiances and parts of my diet, I make the choice to save and eat well easier without having to think about it every time.

5. It’s all About Simple Math

Losing weight is about simple math. Eat less than you burn. Saving money is also about simple math. Spend less than you make. If you earn more, you can spend more. If you you exercise more, you can eat more.

6. Find some Balance

Learning to eat well is not about deprivation. It’s about getting healthy and feeling better. I finished every day with a square of chocolate and a scoop of frozen yogurt. Could I have lost weight faster if I hadn’t? Absolutely. Would I have reached my goal? I’m not so sure. I wanted an occasional treat and by allowing myself one small treat a day, I was better able to reach my goal.

It’s the same with living below my means. It’s not about constant deprivation. I could have saved more if I’d skipped a concert, a movie, dinner out with my spouse or the weekend in Niagara Falls. Instead we budgeted in fun money so that we wouldn’t feel deprived and were better able to meet our financial goals.

7. Enjoy the Process

Diets and budgets don’t work if you don’t enjoy the journey. I had to change my thinking from what I wasn’t eating to how much better I felt when I ate the right foods. I had to change my thinking about budgeting so that it no longer became what I couldn’t spend money on, but making room for spending money in areas I valued. Eating well was not about learning to like melba toast and celery. It was about finding healthy foods I really enjoyed like salmon, almonds, and dark chocolate.

Final Thoughts

One of the most surprising results of this weight loss journey is the money it saved. We ate out less and shopped at the local market more. We ate much less processed and prepared food and avoided the middle section of the grocery store almost entirely. I thought that by switching to healthier foods, I’d be spending more but in the end by avoiding meals out and processed food, our grocery budget dropped considerably. Buying a whole new wardrobe was a different story!

How have you found the journey to wealth similar to the path to health?

Kathryn is a regular contributor on Million Dollar Journey and has a passion for personal finance.  She volunteers her time as a money coach meeting with ordinary Canadians, teaching them the basics of budgeting, no fee banking, saving for the future and other basics of personal finance.





22 Comments, Comment or Ping

  1. That’s a great accomplishment MDJ. When I set a goal I tend to visualize the end result, which gives me enough motivation to keep pushing..
    I also like to constantly improve myself, thus a 20% savings rate would most probably be increased to a 25% or even 30% savings goal..

  2. It all comes down to #5. Eat less than you burn, spend less than you make.

    As someone who lost 75 lbs, I can speak from experience.

  3. 3. Scott

    #6: “Learning to eat well is not about deprivation. It’s about getting healthy and feeling better.” — On the flip-side of this, I’ve never had weight issues but have been on “performance diets”. I used to be a competitive endurance athlete and when I held myself to a strict dietary regime, the physical results were definitely positive and led me to the best shape of my life. However, it took its toll on me mentally. To this day (ten years on), just the thought of canned tuna makes me cringe!

    So, yeah, save every dime you make and watch your wallet build muscle, but if it leaves you sitting at home all the time doing nothing but watching basic cable TV…you WILL go crazy!

    As per #7, one of my recent “lightbulb moments” (sorry!) on this site has been the mantra of “spend money in areas I value”. Don’t know why I didn’t think of that, I just always thought in terms of spending on essentials and saving/investing. Definitely ‘Value Spending’ (even at the expense of saving) enhances the quality of your life.

    As a side note, I’d just like to say how good this site is, really. I read a couple of other money/investment sites and there always seems to be a rather large contingency of “fanatics” taking up space. Not here. I sincerely appreciate all the advice and expertise given by the many contributors (professional and non-pro alike).

  4. May I add #8?

    Enjoy what you wind up with. In other words, reward yourself a bit for your success.

    Clair

  5. 5. Xenko

    Congrats Kathryn. Keep it up! :D Hopefully others can learn from your excellent example.

  6. 6. Sampson

    Congrats Kathryn!

    I’ve been able to do one of those all my life (the save part) – now to apply those concepts to my paunch.

  7. I’ve been doing pretty good with my finances… maybe it’s time to set goals for my weight? While might debt keeps shrinking, my waist is slowly expanding!

  8. 8. dalmanca

    Hi, I have a question about wesabe website. Is it better than accounting software like Microsoft money except it is free? Any security and privacy concern with them? Thanks!

  9. Interesting analogy…can we see before and after pictures?

    Yes I have found the journey to wealth similar to the path to the health. By eating foods that I’ve prepared myself as opposed to fast food, not only did I save more money, but I’ve lost weight as well! Talk about killing two birds with one stone!

  10. 10. Kathryn

    Here is where I posted the before and after photos. (I blocked out my face to hide my identity.) :-)

    http://mommysavers.com/boards/self-improvement/91884-promised-final-before-after-photos.html

  11. Well Done Kathryn!

    In the words of Robert Kiyosaki:

    “Physical exercise improves health, mental exercise improves wealth, laziness destroys both.”

    InvestAssetWealth

  12. 12. vilkri

    There is another similarity. If you want to keep off the weight, you got to change your eating habits. If you fall back into your old habits, you start gaining weight again even after a successful diet. Saving money is similar. If you want to continue saving money, you need to change your spending habits.

  13. 13. Phinance

    Pretty cool way of looking at saving. I’m really good at setting goals to lose weight, but not great at saving money. I manage to put away about $1k a month, but I could be saving more.

    Here’s a question: should I be paying off student loans and my car loan, or just making the minimum payments and saving everything? I’ve been paying off more than the monthly payments for the school and car loan, and have been moderately saving.

  14. Phinance, in my opinion, once you have an emergency fund that you are comfortable with, pay off the debt in the order of the highest interest.

  15. 15. Deborah

    Just joined up at FitDay — it’s wonderful — exactly what I’ve been thinking that I needed to get going on losing 20 lbs.
    It’s taken me a year to develop good financial habits and routines — 6 months of “trying” and getting nowhere and 6 months of getting serious by reading PF books, blogs and forums and by tracking and planning expenses. I began to realize that a big-picture person like me has to force herself to sweat the small stuff. More recently, I began to see a parallel between financial habits and diet habits and to understand that if I am ever to achieve my goals, I need to stop being so darned easy-going and start being somewhat obsessive-compulsive about what I really care about. It’s working and I am now optimistic that I can do what I need to re. weight loss.
    Thank you!

  16. 16. TStrump

    I sure love to eat, which has gotten me into trouble with respect to my weight in the past.
    I also love to spend, which has gotten me into financial trouble.
    Thankfully, I’ve learned to ‘cut the fat’ the past 5 years.
    Thanks!

  17. 17. Horlic

    Kathryn thanks for sharing. For me on top of the above points, persistent is vital. I believe in achieving goals we need to be persistent with what we are doing either losing weight or saving money.

  18. 18. Phinance

    FrugalTrader,

    Thanks for the response. I think I’ll follow that advice, though I’m a bit paranoid about what the right emergency savings amount should be. I want 2 years of savings at least.

  19. Hey Phinance,

    I think 2 years is a really really safe cushion :) you would be good with that. Generally I think they say you should have at least 3 paychecks saved for emergency purposes.

  20. 20. RLG

    Actually, saving money and losing weight doooo have a lot in common. If it was easy…we’d allll be rich and thin.

    Seriously though. Best load up any TSFA accounts you can. I wonder how long before they go the way of the income trust.

  21. Great round up post. Step number 2 is absolutely vital. Writing down all your expenses and tracking them on a monthly basis will give you a better idea on where you can possibly cut down any unnecessary expenditures. Wesabe is a great online personal finances tracking tool! Thanks for the suggestion.

  22. 22. ETF Income

    I really think even 1 year is a safe cushion. Plus at least some passive income that you earn along the way. (e.g. dividend, monthly income) from your stock and mutual funds portfolios.

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