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Small Steps to Health and Wealth

We've all heard the old adage "All things in moderation." These words are a good motto to follow when addressing two of society's most pressing issues: financial illiteracy and obesity. There is a school of thought that says "personal control" is an important factor affecting both of these problems. Therefore, developing a proactive plan to change is an important part of the solution.

Below is a summary of ten similarities between improving one's diet and finances:

• Problems develop gradually and people often don't realize it at first. An example is weight gained slowly over time (e.g., 2-3 pounds per year) due to increasingly sedentary lifestyles and larger portion sizes. A comparable financial example is the increasingly high cost of interest on credit card balances that increase steadily as higher debt loads are revolved.


• A recommended weight control strategy is to "convert calories into labor" by researching how many hours of exercise, gardening, or house cleaning are needed to burn off a certain number of calories. A comparable financial example is "converting spending into labor" by calculating how many hours of work are needed in order to buy something.


• Another control strategy is to meet yourself halfway. You can lose weight and still eat your favorite foods. Just decrease your portion sizes by half. A comparable financial example is to reduce spending on "discretionary" expenses such as meals eaten away from home, lottery tickets, clothing, and food. Don't cut out spending on these items completely but spend less than you do now. Plans to change are more likely to succeed when people don't feel "deprived.


• Downsize your meals. Eat lunch portions and appetizers at restaurants or take food home for another meal, both of which also save money. Household spending can also be downsized. Simply figure out ways to purchase items for less or just buy fewer of them.
• Say no to super-sizing for all types of purchases. No matter how much of a "better deal" upgrading a meal's size may be, don't be tempted. Steer clear of "meal deals" altogether and order smaller portions. Ditto for non-food spending such as "buy three and save" when you only need one item. Offers that require you to spend more to save more need to be scrutinized carefully.


• Track your eating and spending habits and record the results. Most people don't have a clue how many calories they consume daily or how many dollars they spend monthly on "incidentals." One of the best ways to increase awareness of current practices is to record foods eaten and dollars spent for a typical month or two. Look for relationships between eating, spending, and emotions.


• Apply recommended formulas to compare yourself with expert recommendations. A nutrition example is body mass index (BMI), which is a person's weight in pounds divided by their height in inches (squared) multiplied by 703. A BMI of 18.5 to 24.9 is considered healthy, 25 to 29.9 overweight, 30 to 39.9 obese, and 40+ morbidly obese. A comparable financial example is a person's consumer debt ratio, which is calculated by dividing monthly consumer debt payments by monthly take-home (net) pay. The recommended debt-to-income ratio is 15% or less. A ratio of 20% or higher is considered an indicator of financial difficulty.


• Small remedies make a difference. Some people don't try to improve their health or financial habits because they feel that their situation is hopeless or that major changes are required. Not so. Simple behavior changes, such as drinking an 8-oz soda instead of 20 oz, or using less butter or salad dressing, can help people lose weight. The same is true for small financial changes. Two examples are saving a dollar a day, plus pocket change, in a can or jar and adding fifty cents a day (about $15 monthly) to the minimum monthly payment required on a credit card.


• Learn the standards upon which nutrition and personal finance recommendations are based. For example, people often understand portion sizes better when they are compared to objects. Three ounces of meat is the size of a deck of cards or an audiocassette tape and one cup of rice or pasta looks like a tennis ball. A common standard for personal finances is saving three to six months expenses for emergencies. This translates to an emergency fund of $6,000 to $12,000 for a household that spends $2,000 a month.


• Control intake and outgo. For weight loss and improved health, this means reducing the calories you consume, increasing exercise to burn off more calories, or both. For improved finances and positive cash flow, increased income, reduced expenses, or both, are the keys to success.