Boost your financial IQ and lose weight

Managing your money has nothing to do with managing your weight, but they have more in common than you might imagine.

In particular, both are skills that you can easily acquire. In fact, both skills are based on precisely the same 8 step process outlined below.

It is no coincidence that this process applies to both money management and weight management. This process is based on the same planning processes that businesses use and it can be adapted to a wide range of situations.

  • One of the good things about this process is that it is totally free – you can use it without buying anything.
  • Another good thing about the process is that you can easily adapt it to your own circumstances.
  • The best thing about this process is that it has been proven to work.

In a nutshell, the process is all about making decisions that will help you move from where you are to where you want to be.

Note: Paul Gerrard is a Certified Financial Planner; not a weight loss expert – although he has lost 15k and feels better for having done so. The reason for including the weight loss example is to demonstrate the generality of this process.

Step 1 – Assess where you’re at
  • Take a good hard look at your situation.
  • In doing this, put aside any emotions or preconceived views.
  • Be objective and totally honest with yourself.
  • Just gather the facts and move quickly to Step 2.
Managing your money

  • DO what businesses do – make a list of all your assets and liabilities, make a list of all your income and expenditure for the past year, and prepare a budget for the next year.
  • DO keep it simple – you can add more detail later.
  • DON’T over-complicate the lists or budget. In some circumstances they could be just a few numbers. In other cases, more detail may be warranted.
  • DON’T focus on any one aspect of your situation.
  • DON’T compare yourself with anyone.
  • DON’T think “If only …”.
Managing your weight

  • DO find out how much a person of your height, age and sex should weigh. Your doctor can advise you. Alternatively, there are numerous books and websites that indicate healthy weight ranges.
  • DO weigh yourself.
  • DON’T compare your image in the mirror with photographs of models. Models are exceptional people. They have been trained in how to present themselves. They have been groomed and photographed by professionals. Their photographs have probably been digitally edited. Their images are about as realistic as the curves of a Barbie doll.


Step 2 – Reflect on your current position
Reflect upon how you feel about the facts you gathered in Step 1.

  • What do these facts mean to you now?
  • How would you feel if your situation were to remain the same?
  • What would it mean to you if your situation were to improve?

Ask yourself:

  • Is my situation likely to improve if I continue to do exactly as I have done in the past?
  • Am I prepared to change what I do in order to move to a better situation in the future?

As you reflect upon your situation, don’t blame yourself or anyone else for your situation, but focus your attention on whatever matters to you the most.
Summarize your emotions and thoughts in a few sentences.

Managing your money

  • DO think about every aspect of the lists and budget you created in step 1.
  • DO think about how your financial situation impinges on your life and how it makes you feel.
Managing your weight

  • DO consider how your weight compares with the healthy range of weights for people of your height, age and sex.
  • DO consider how you feel about your weight and how it may impact on your health, your social life, and your self-esteem.


Step 3 – Decide where you would like to be
In Step 2 you reflected on your situation. Now, with these reflections in your mind:

  • write a list of the thing(s) you most want to change; and
  • next to each item write how you will benefit from the change(s).

Then make a list of SMART goals (i.e. goals that are Specific, Measurable, Achievable, Relevant, and Time-specific).
This list could include a series very short term goals, medium term goals, and long term goals. For example:

  • Today I will …
  • By the end of the week I will …
  • By the end of the month I will …
  • By the end of the year I will …
  • Within five years I will …

Make sure that your very short term goals are very achievable.
Regard the subsequent goals as a “first draft” which you can review and amend at any time.

Managing your money

  • DO understand that money management is all about making decisions and that your current financial position is due the decisions you have made in the past.
  • DON’T worry if you have difficulty with SMART goals. SMART goals do not suit everyone. Just list your goals as best you can and move on to Step 4.
Managing your weight

  • DO seek advice from your doctor, or other health care professional, if you are want to lose a lot of weight quickly.
  • DO understand that weight management is all about making decisions and that your current weight is due the decisions you have made in the past.


Step 4 – Plan how to go from where you are to where you want to be
  • First, do a SWOT analysis. That is, list all of your strengths and weaknesses that are relevant to achieving your goal(s). Then list all opportunities that may help you achieve your goal(s) and all threats that may prevent you from achieving your goal(s).
  • Second, consider how you may use your strengths and opportunities to achieve your goals(s) and what you can do to overcome your weaknesses and threats so that they do not stop you from achieving your goal(s).
  • Third, brainstorm ideas. That is, list all the ideas you can think of that might help you achieve your goals.
  • Fourthly, select one or more of the ideas and write a plan of how you can use the idea(s) to achieve the goals you set in Step 3.
  • Finally, make sure your plan includes taking action to get information that will help you achieve your goals. Such information is freely available in public libraries and on the web, but you may prefer one-on-one advice from a doctor, financial planner, dietician, life coach, or other relevant professional.
Managing your money

  • DO get advice from a financial planner.
  • DO be wary of things that look too good to be true.
  • DO get a second opinion if you are unsure.
  • DON’T take big or unnecessary risks.
  • DON’T act on any advice unless you understand it and feel comfortable doing it.
  • DON’T expect to make money by buying computer software – other people make their money by a selling such systems; not by using them.
Managing your weight

  • DO have a balanced diet. Your body needs a mix of carbohydrates, fats and proteins. It also needs a mix of vitamins and minerals.
  • DO include exercise in your plan.
  • DON’T plan to starve yourself to lose weight. Your body needs a certain amount of calories every day.
  • DON’T plan to buy any special diet foods, supplements, pills, or exercise equipment unless your doctor suggests you do so.
  • DON’T expect any “miracle” diet or exercise machine to give you the body you want.


Step 5 – Set key performance indicators (KPIs)
  • Using the goals you set in Step 3 as a guide, set KPIs that you can use in the future to show whether you are on-track to achieve your goals.
  • Using the plan you prepared in Step 4, set KPIs that you can use in the future to show whether you are on-track in terms of doing the things you planned to do.
  • Keep your KPIs simple and realistic – you can amend them at any time.
  • Don’t spend a lot of time on this step.
Managing your money

  • DO set KPIs for for what you plan to do tomorrow and the next day as well as long term KPI’s.
Managing your weight

  • DO set KPIs for for what you plan to do tomorrow and the next day as well as long term KPI’s.


Step 6 – Implement your plan
  • In Steps 1 to 5 you decided where you want to go and you planned how you are going to get there. These steps were important, but alone they will achieve nothing.
  • It is much like having planned to take a long journey. Your plan may be perfect, but you will never get anywhere until you step outside your house. Now is the time to step outside and put your plan into action.
  • Start today.
  • Every day, try to do something that you have planned to do.
Managing your money

  • DO start small.
  • DO remember that managing your money is a skill – and just like golf, tennis and dancing – the more you practice the better you will become.
  • DON’T take any extreme action.
  • DON’T assume your plan is going to work without at least some professional guidance, fine-tuning and on-going effort.
  • DON’T become over confident.
Managing your weight

  • DO get digital kitchen scales so that you can accurately weight the food you eat.
  • DO obtain information about the energy, protein, fat, and carbohydrates in foods and drinks you consume.
  • DO read the nutritional information on food you buy.
  • DO keep a “consumption diary”. This diary is to record everything you eat or drink. It should show how much you consumed and when you consumed it.
  • DON’T overlook the little things you can do. For instance, a step forward could be as simple as: choosing to eat an apple rather than a donut, choosing to take the stairs rather than the elevator, and choosing to go for a walk rather than watch TV.


Step 7 – Review your progress
Compare your progress with your KPIs.

  • If you are on track to achieving your goal you should congratulate yourself and take pride in your achievement. If you are satisfied with your progress just keep following your plan. Alternatively, if you feel you could move a little faster you may wish to revise your plan and KPIs.
  • If you are on track in terms of doing the things you planned to do you should also congratulate yourself and take pride in what you have done.

Do not lose heart if you are not on track. Perhaps, your KPIs were overly ambitious and you should revise them.
If your progress continues to disappoint you, seek professional advice to put you on track.

Managing your money

  • DO be realistic
Managing your weight

  • DO weigh yourself at regularly. (Preferably naked and at the same time of day.)
  • DO expect your weight to fluctuate throughout the day and from day to day.
  • DO expect a trend to become apparent over a couple of weeks.


Step 8 – Update your thinking
Ask yourself:

  • “What did I learn by reviewing my progress?”
  • “In view of what I have learned, is there anything in my thinking that I should up-date?

For example, if you have met all your KPIs you will need to set new KPIs.

On the other hand, if you have not met all your KPI’s you need to consider whether the KPI’s were unrealistic, whether the plan was flawed,
or whether there were reasons you did not do what you planned to do?

The key element in this step is to learn from your experience and to update your thinking accordingly. This may involve amending your KPI’s, your plan, your SWOT analysis, or any other thoughts from previous steps.

SucceUltimately, your success depends on you, but many people .

Managing your money

  • DO be realistic
  • DO be prepared seek advice
  • DON’T expect immediate success
Managing your weight

  • DO be realistic
  • DO be prepared seek advice
  • DON’T expect immediate success

This process is not rocket science and anyone can use it.

  • Step 1 gives you awareness
  • Step 2 gives you motivation
  • Step 3 gives you direction
  • Step 4 gives you method
  • Step 5 gives you action
  • Step 6 gives you feedback
  • Step 7 gives you learning
  • Step 8 gives you improvement

Ultimately, the benefit you get from this process depends on you. It is much like learning to play the piano – you won’t become a good pianist by skim reading a book. You are only likely to become a good pianist if you have a good teacher and you are prepared to practice. So too with managing you money or your weight. It will take time, effort and possibly professional help.

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