Barbara O’Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management
Rutgers Cooperative Extension
“When health is absent, wealth is useless,” according to Herophilus, an ancient Greek physician. For the past decade, Rutgers Cooperative Extension’s Small Steps to Health and Wealth™ (SSHW) program has encouraged people to take positive action to simultaneously improve their health and personal finances. In addition, SSHW provides information and conducts research about associations between individuals’ health status and financial well-being. Below are some recent research findings and news summaries that indicate a variety of different ways that both aspects of people’s lives- their health and personal finances- are related:
- Personal qualities such as organization and focus matter when trying to improve your health and finances. A Florida State University psychology professor found that exhibiting self-control in one area of a person’s life affects others. As summarized in an article by Money magazine (August 2012), “building up discipline in one area (e.g., exercising regularly) translates to more discipline generally.”
- A University of California study estimated that a one-cent-per-ounce tax on sweetened beverages, which would add twenty cents to a 20-oz bottle of soda costing about $1.25, would prevent 2.4 million cases of diabetes, 95,000 cases of heart disease, and 26,000 premature deaths in the next decade.
- A study of discrimination based on obesity in workplace hiring decisions, reported in the International Journal of Obesity, found that criteria about potential employees (e.g., leadership potential) were negatively affected for women who were considered obese. A 2007 Michigan State University study found that women were 16 times more likely than men to report weight discrimination at work.
- Starting in 2014, the 2010 health care reform act will allow employers to charge obese workers 30 to 50 percent more for health insurance if they decline to participate in a qualified employee wellness program. Exceptions can be made for workers who can’t participate due to certain health conditions (e.g., asthma).
- The total annual cost of workplace “presenteeism” due to obesity is estimated at $30 billion. This means that obese employees are on the job but their productivity is reduced due to shortness of breath, pain, and other health-related factors. Not surprisingly, decreased productivity often results in reduced wages. A Cornell University health economist found that obese women earn about 11% less than women of healthy weight. Based on an average U.S. weekly wage of $669 in 2010, he calculated a $76 weekly “obesity tax.” Over a person’s entire career, this can add up to tens of thousands of dollars of lost earnings.
- A 2011 Wall Street Journal article reported the increasing consideration of a parent’s food-shopping habits, weight, and health status in child custody decisions at divorce. Specifically, accusations about a soon-to-be ex-spouse’s weight and lifestyle are used to influence judges’ decisions about which parent can provide the best care for children, including healthy and nutritious food and regular physical activity.
- A 2011 George Washington University study calculated the individual cost for being obese at $4,879 for women and $2,646 for men. Obese women earn less than women of normal weight but wages don’t differ for obese men. If these dollar amounts were invested annually over a 40-year career at an 8% average annual return, an obese woman could have over $1.2 million and an obese man almost $700,000.
- A 2011 study in the Journal of Consumer Research found that paying for food with cash can curb spending on unhealthy items. Using “plastic” of any type (i.e., a credit or a debit card) was found to lead to impulse purchases of high-calorie foods such as cookies, ice cream, and chips. It is theorized that this is because people don’t feel the same “pain” (loss of their money) when buying something with plastic as they do when paying with cash. “Plastic” payments are more abstract and less “noticeable.”