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What the Human Body Can Teach About Personal Finance

by Craig Ford

Are you financially healthy?

Most people have an idea of where they want to be financially.  However, the money never seems to be enough and the bills tend to be too much.  After struggling with debt we wonder if we are financially healthy.

8 Principles of Health and Applied to Financial Health

The book Healthy Congregations: A Systems Approach, Peter Steinke lists ten principals of health and disease.  Taking his cue from the human body, he relates 10 health principals to the life of a church.  Today we will take eight of the observations on the human body and relate them to finances.

1. Health Principle: Wholeness is not attainable – You can never be completely free of germs.

Personal Finance Principle: You’ll never have the perfect financial plan.

Perfection is one of the enemies of a healthy financial plan.

People are paralyzed by the dizzying array of choices.  Consider saving for retirement.  Should you get a Roth IRA, Traditional IRA, 430(b), or 401K?  After that choice you are forced with deciding between CD’s, bonds, stocks, mutual funds, or ETF’s.  Often times we are so intimidated by the process and have an unhealthy fear that we will never be able to perfectly figure things out. As a result we do nothing.

Strive to do good financial things, don’t try to be perfect.

2. Health Principle: Illness is the necessary complement to health – At times a small dose of a disease is what your body needs to fight that disease (think immunizations).

Personal Finance Principle: Financial mistakes provide the best environment for learning money lessons.

Often times it is through failure that we learn.

When the body is exposed to a small dosage of a sickness (immunization) the body is strong enough to overpower that sickness and in the process builds up an immunity.  All of us have made financial mistakes.  The key question: did that mistake allow you to build up an immunity so you will not repeat the error?  At times, financial security involves protecting your money from yourself.

3. Health Principle: Agents of disease are not causes of disease.  Bodies get sick when it forgets how to respond to disease.

Personal Finance Principle:  How to respond to a situation is sometimes as important as the situation itself.

Your financial situation is a combination of causes and effects.  Where you place the most emphasis dictates a lot about your financial health.  For example, if you say you are struggling because your “boss did this,” and the “government did that,” then the problem is not the event, but your response.  In general, (and with some obvious exceptions) 10% of your financial standing is because of what happened and 90% because of how you reacted.

4. Health Principle: All illness is interconnected.  Sickness impacts the entire body.

Personal Finance Principle: Finances work like an interconnected machine.

What happens to one ‘component’ of your financial plan will often affect and impact another.  Consider, for example, a declining income.  This could be from slow business or even a lay off.  This automatically requires the financial system to adjust – spending must decrease to save the system.  Think also about the person who pays off their debts.  The system now runs more efficiently because a negative component has been removed from holding back the entire system.  If you have a bad system you need to stop making bad money choices.

5. Heath Principle: The subtle proceeds the gross.  You’ll feel a little sick before you feel really sick.

Personal Finance Principle: Identify financial gains and losses early.

A bad habit may only make a small difference in your bank account.  However, multiply that small problem across a 40 year working career and that subtle issue has grossly extended its negative impact.  Address small issues now before you pay a huge cost later.

On the other hand, if you identify a good habit and continue that over a 40 year working career you will find wildly successful results.  You might become an accidental millionaire by doing a few small things for a long period of time.

6. Heath Principle: Each human body is different.

Personal Finance Principle: You need a personalized financial plan.

This may be a debt reduction plan or a personalized investing plan, but it must be catered to your needs.  Too often we decide we just don’t want to think.  We seek someone smarter, someone more educated with the hopes of asking them to take care of “it”.  No one knows your needs, values, and risk tolerance like you.  There is no one-size-fits-all plan.

7. Health Principle: A healthy circulatory system is the keystone of health and healing.  The body requires feedback from other parts of the body.

Personal Finance Principle: Wise financial managers have a feedback system where they continue to learn and accept wise counsel.

If you close yourself off from the feedback of others this will have a negative impact.  Instead, open yourself up for the wise counsel of others.  Unfortunately, there are startling statistics on how little people read.  If you want to keep learning here is a list of the 88 most recommended personal finance books.

8. Health Principle:The brain is the largest secreting organ of the body.

Personal Finance Principle: With personal finances the brain and the heart combat for ultimate control.

Do you ever know what is the right thing to do with your money, but feel like you just want to do something else?  Things like envy and greed come from the heart.  Things like simplicity and discipline come from the brain.  Which organ will you give supremacy to?

What other ways does it seem that there are parallels between health and disease?


Published or updated January 13, 2010.
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{ 5 comments… read them below or add one }

1 Ken

An ounce of prevention is equal to a pound of cure. To prevent debt (disease), don’t sign up for it in the first place. Have an emergency fund…your first line of defense against debt.

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2 LeanLifeCoach

# 2 spoke to me. You cannot learn without doing and this sometimes means failure.

Our society should emphasize personal responsibility in finance and in health more often!

Nice job on this post!

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3 Mrs. Money

This is great! Without your health, you don’t have anything!

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4 Dreamer

Gotta tell you, #3 is completely and totally wrong. Illness happens when the body responds appropriately to a disease. Fevers, chills, aching, coughing, sneezing, stuffy noses… All immune responses that kill off disease by making a more inhospitable environment, or allowing the immune system better access to the diseased area.

For what happens when the body forgets how to respond to disease, see immunocompromised people. Nothing. They have no idea they’re infected, until the disease is so bad that the agent itself is causing problems.

This is a finance allegory too. If you don’t have the proper tracking and assessing set up, you might not even know how bad your finances are until it blows up in your face.

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5 David Buchanan

I enjoyed reading this. I want to apply these eight principles to my everyday life as well, especially principle number one. I find that I am so concerned about doing things perfectly that it takes me forever to get anything done, enjoyable tasks become stressful, and I often miss the big picture because I am so concerned with the details.

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