Rutgers Cooperative Extension is launching a new program initiative designed to improve the health behaviors of New Jersey citizens. There are strong parallels between improving one's health and one's finances. Below are twelve similarities:
Problems Generally Start Small- An estimated 129.6 million Americans, or 64 percent, are overweight or obese, but this didn't happen overnight. Weight problems usually develop gradually, such as gaining 3-4 pounds a year due to increasingly sedentary lifestyles and larger portion sizes. A comparable financial example is "perma-debt" (i.e., a permanent debt balance) on credit cards and increasingly higher interest charges as outstanding balances rise.
Less Stigma Than Before- With almost two-thirds of Americans having "weight issues" and over 1.5 million bankruptcies filed by consumers in 2002, these problems have gone "mainstream" and become more accepted by society. A factor related to both problems is the increasing number of Americans who have no health insurance. More than 20% of people who file for bankruptcy complain that medical debt is a problem.
Impacts on Job Productivity and Job Discrimination- Overweight and unhealthy people often have a difficult time getting hired and some may have difficulty performing duties associated with their job. Personal finance problems also affect job productivity. One study by researchers at Virginia Tech found that 15% of workers have financial problems (e.g., high credit card debt, lack of a budget) that affect their performance at work.
Need For Programs in Schools- Much as been written about poor school lunch choices and children's lack of exercise as school physical education programs have been cut. Youth financial illiteracy problems exist as well. A recent survey by the Jump$tart Coalition For Personal Financial Literacy found that high school students continue to fail a test of basic personal finance knowledge with an average score on the 2004 survey of just 52.3%.
Need For Programs at Work Sites- Many adults spend a good portion of their day at work. Various employer-sponsored programs can enhance health and wealth such as a company gym or exercise programs, healthy vending machine or cafeteria options, health screenings, seminars on company benefits, and tax-deferred retirement savings plans with employer matching.
Need For "Point of Purchase" Information- Unlabeled food items, like restaurant meals, are a challenge for people watching their weight. There is no nutrition label to look up calories, fat content, etc. A helpful strategy is carrying around one of those "pocket books" that lists the calorie content of foods. A financial example is the proposed "warning label" for credit cards that shows the time and interest cost of a balance where only minimum payments are made.
Lots of Technical Jargon- A recent survey found that nearly half of American adults have higher risks of health problems because of trouble understanding medical terms and directions. Comprehending investing terms and personal finance's arcane language is also a challenge.
Advice Needs to Be Realistic- A recent Wall Street Journal article questioned whether government nutrition guidelines are out of synch with the way Americans actually eat. The same can be said for some financial advice (e.g., saving 10% of income) that is widely ignored.
Lack of Limits Causes Problems- Studies have shown that, when people are given more food, they eat more. Likewise, when people are given a higher credit line, many charge more.
Restrictions Help Avoid Problems- Many people find it easier to lose weight by eating portion-controlled foods with nutrition labels. A comparable example of a financial restriction is a fixed rate loan with a defined balance and regular monthly payments instead of an open-ended home equity line of credit. Another is having savings automatically deducted from pay.
Drastic Solutions Have Drawbacks- There is no easy way to lose weight or dig yourself out of debt. Rather, it takes perseverance and time. Gastric bypass surgery can reduce weight quickly but has all the risks associated with surgery, including death. Bankruptcy gets creditors off your back but it will also stay on your credit file for up to 10 years and you will either have to stay on a stringent budget for up to five years (Chapter 13) or liquidate some of your assets (Chapter 7).
Health and Wealth are Related- People "invest" in their health (e.g., a good diet and exercise) just like they do in a college education. A 2003 study found that men who ate more fruits and vegetables in middle age ended up saving thousands of dollars a year in medical bills after age 65 compared to men who ate less. Healthy people are often more productive and have fewer work absences and medical expenses that erode their wealth. They also live long enough to collect their Social Security benefits. Eliminating unhealthy behaviors can result in huge financial windfalls. According to the book Getting Rich in America: 8 Simple Rules, a person could have $290,363, at an 8 percent rate of return, if they saved $1.50 a day on junk food, alcohol, or tobacco from age 18 to 67. Bump that amount up to $5 a day and you're talking about the difference between becoming a millionaire at retirement...or not.