Question: They say that we do not plan to fail. We simply fail to plan. But I do plan and yet fall short of my financial goals time and time again. How can I get out of my rut?
Answer: Astronauts have reported it. Photos and videos have proven it. You cannot see the stars in outer space. In fact, no stars can be seen from the moon. But how can that be when there is no atmosphere, no clouds, and no haze on the moon? So, was the moon landing just staged?
There is actually a logical explanation to why no stars can be seen from the moon and even from space. Cameras and our eyes operate in the same way. To capture photos or videos, cameras manipulate what is called the exposure triangle, which is comprised of the aperture or opening of the camera lens, shutter speed that controls the length of exposure and the ISO that controls the sensitivity of the camera sensors.
Usually astronauts land on the side of the moon facing the sun. On that side, sunlight can be really bright and to capture photos or videos, a camera’s aperture (lens opening) needs to be reduced, shutter speed needs to be increased and/or ISO value needs to be lowered. Doing so will help capture the image in focus but will fail to capture the faint light of distant starts.
Our eyes behave in the same way but automatically. Our pupils contract when there is bright light. Doing so allows us to see better what we are focusing on but at the expense of seeing other things. If we were to walk into a dark room, after a few seconds, our pupils will dilate to allow for more light to enter them. Soon, we will be able to better see items in the room like a battery-powered lamp whose battery is failing. But once the light is turned on in the room, that lamp will look like it is turned off. On the moon, when astronauts step into the shadow of a large lunar rock that is able to block the sun’s light significantly, their eyes adjust, thereby allowing them to see the celestial bodies in space.
Similarly, our brain is easily blinded by the glitter of the here and now to the extent that we forget our long-term financial objectives. Convenience is one of the culprits of failing to see through with our financial plans. So, one of the best ways to achieve your financial goals is to make it inconvenient for you to shell out cash.
One way is to open passbook savings accounts. Such accounts not only have higher minimum balances but also require you to be physically present at the bank and wait in long lines to make withdrawals. Most banks are also closed on weekends, the time of the week when we do revenge spending.
Another way is to avoid credit and debit cards when making purchases. Such devices have built-in anesthetics that dull the pain of cash flowing out of your mental store of wealth. The same is true with online purchases that link to your savings accounts or e-wallets.
Talking about online purchases, avoid the ATC disease that has disastrous effects on financial health and that has no known cure. ATC stands for “add to cart.” I know of people who cannot even add to their cart anymore because the cart itself is full.
The more items you add to your online shopping cart, the more you are tempting yourself with eye candy. One effective prophylactic against contracting ATC is to always read the worst comments on a product first. The practice will not only prevent you from wanton spending but will also help you avoid falling into scams.
If you are a shopaholic, one way to reduce spending is to follow the pay yourself first principle, which means saving before spending. And an effective execution of the pay your first principle is to enroll in the auto debit services of some banks that will spirit away your target savings into investment accounts. Do not worry if there are high exit or redemption fees on your investments as you need those to discourage you from making early withdrawals. And besides, those exit or redemption fees go away if you stay long enough in your investment.
So, in a sense, you just need to close your eyes to the glitter of current consumption that is blinding you right now, especially during the holidays. Doing so will not only allow you to make that wish for a better financial future, but will, when you do “open your eyes” after counting to three months, years or even decades, allow you to enjoy the fruits of your hard work.
A blessed Christmas to you and your family. INQ
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Efren Ll. Cruz is a Registered Financial Planner and Director of RFP® Philippines, seasoned investment adviser, bestselling author of personal finance books in the Philippines and a YAMAN Coach™. To consult with a YAMAN Coach™, email [email protected]. To learn more about personal financial planning, attend the 105th RFP Program this January 2024. To inquire, e-mail [email protected] or text at 09176248110)
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