What Are the Financial Costs of Unhealthy Living?

What Are the Financial Costs of Unhealthy Living?

What Are the Financial Costs of Unhealthy Living?

I think we all know that being overweight, not exercising, eating crap, and mental instability can have many negative effects on your quality of life. I’ve been obese. I know how difficult it was to walk up or down stairs, how I got tired very quickly, and how sick I was all the time. When I was pregnant with my daughter, I had severe gestational diabetes, which meant I was on a seriously restricted diet and had to prick my finger with a needle 7 times per day - 4 to test my blood sugar, 3 to give myself insulin. It was HELL! But one thing I didn’t think of was the cost of an unhealthy life.

Late last year a very close friend of mine had a heart attack. While in the hospital, it was also discovered that he had high blood sugar. Thankfully, he survived and is thriving. However, he now pays early $500 a month on high blood pressure and diabetes medication. That’s $6,000 a year he now has to dedicate to something he wouldn’t have needed is he had taken care of himself.

I bet you didn’t know that eating healthy and exercising regularly could save you $6,000 a year. Shocking isn’t it, that a healthy person can save up enough money in one year to buy a nice used car with what an unhealthy person spends on pills. Well, that’s some major incentive!

According to a study by The Rand Corporation, obese individuals will spend on average 36% more than healthy-sized people on health services and 77% more on medications. Additionally, shopping for “Big and Tall” sizes for men and “Plus-Size” clothing for women is going to cost you 10% to 15% more than regular-size clothing.

If you’ve never thought about the correlation between overall health and the fatness of your wallet until, now you know how poor health costs a lot of money that most of us don’t have. Better health = better financial health.

How Does a Poor Diet Affect Your Wallet

empty wallet.jpg

First, let’s figure out what your monthly budget for food should be. *Please note, these numbers are for single adults. Families and couples are expected to spend more.

Many financial planners would say that your food budgeting should be no more than 10% of your take home pay. If you are spending more than 10% of your take-home pay on eating, you are spending too much.

For example:

A person who lives alone and makes $52,000 per year, assuming a 24% tax rate.

Gross Annual Salary   $ 52,000

Tax Rate (24%) -   $ 12,840

Net Annual Income = $ 39,520

Now 10% of your take home income = $3,952 annually, which equals $329.33 per month.

I want you to take a few moments and evaluate the last 30 days of your expenses from your bank and credit card statements. Write down all of the $$ spent on food. Is it more than 10% of your take home salary?

Now calculate how much of that money is spent on eating out. It is recommended that you have a 1:2 ratio for eating out versus groceries.

$329 monthly equates to this breakdown - $109.66 eating out : $219.33 groceries. Remember, we are calculating using 3 meals per day times 30 days in a month = 90 meals. $109.66/9 = $12.18 per meal when eating out with the remaining 81 meals costing $2.71 each.

So, a person who is making $52,000 per year, with a 24% tax rate, should be spending no more than $109.66 per month ($1,316 annually) eating out.

How do your expenses rate?

Why is this important? Because if you are eating out, it generally means you are not eating as healthy as you could be. Unless you are eating a salad with minimal dressing every time you eat out, you are probably not making the best choices when it comes to food. The more of that $329 that you spend on eating out, the more likely it is that you are not eating very healthy.

An unhealthy diet leads to Hypertension, Type 2 Diabetes, and other chronic diseases like arthritis, and certain types of cancers. All of these conditions appear gradually, and are the result of consistent maltreatment of our bodies and in the United States, chronic diseases kill 9 out of 10 people.

In other words - WE ARE EATING OURSELVES SICK and it’s costing us a lot of money!

How To Fix

“There are a lot of parallels between good eating habits and good financial habits,” says Jeff Reeves, author of “The Frugal Investor’s Guide to Finding Great Stocks.” “If you don’t have the discipline to say no to junk food or count calories, you probably make a lot of impulse buys and have trouble balancing your checkbook. Self-control is the key to good financial health, as well as a healthy diet.”

The CDC estimates that losing 10% of your body weight can help decrease your lifetime medical costs by $5,300, at a minimum. If you can delay the onset of heart disease, diabetes and cancer you will save thousands of dollars every year in healthcare costs (on top of, you know, not dying).

According to this study by Duke University -

It is not [necessarily] lack of exercise or poor diet, per se, that is leading to poor financial choices,” Israel says. “Rather, a person who possesses the skills to better manage their health is more likely to possess the skills to better manage their finances.

Anyone carefully tracking his expenses can attest to to how horribly dining out can wreak havoc on your wallet. According to the USDA, a family of four eating moderately at home will spend about $245 per week on food—that’s half of what they’d shell out eating at restaurants.

The easiest way to curb your spending and increase your healthy options is to eat at home more often. No, that doesn’t mean use UberEats to have your favorite unhealthy food delivered to your door. Don’t be that guy/gal!

When I say eat at home more, I means COOK. You know that thing in your kitchen with the burners and oven? That is an appliance that you can use to cook raw food and make them taste great, while still being healthy. Yes, I know, its a novel idea, but to really be healthy you should learn to love cooking for yourself and your family. It’s one of the best ways to show that you love them - by making them food that will help fuel them, rather than kill them.

If you are someone who doesn’t know how to cook, relax. It’s not that hard. There are tons of healthy eating cookbooks to help you out, but the below are some of my favorites.

mediterranean cookbook.jpg

The Complete Mediterranean Diet - https://amzn.to/2T3PQPd

Fit Men Cook - https://amzn.to/2Hicge8

Great Food Fast - https://amzn.to/2REMMwr

The Food You Crave - https://amzn.to/2AS9iHQ

Practical Paleo  - https://amzn.to/2T7XVCI

How much money can you save by eating healthier foods at home? Let’s find out.

Let’s assume that you are eating out more than is recommended, and that 50% of your monthly food budget goes to dining out. At 90 meals per month, with half 45 of those eating out x $12.18 per meal = $548.10. The remaining 45 meals at $2.71 each = $121.95. That’s a total monthly food cost of $670.05.

$670.05 - 329.33 - $340.72 more you are spending per month on food because you are eating out so often.

$340.72 per month = $4,088.64 per year = $122,659.20 over a 30-year span. That’s how much money you could save over a working lifetime.

And because you are eating out so much, this cost doesn’t include all the extra fat, sugar, and cholesterol that you consume, which makes you fat and sick and causes your healthcare expenses to rise. Imagine having over $120,000 extra dollars when you retire?

It’s Not Just About Food

While nutrition is important, exercise also adds to your financial wellness. People who exercise regularly have a higher level of cognitive ability and memory. Your more active coworkers are more inspired, more confident, make better decisions, and are better at achieving goals. Healthier employees earn more, are given more opportunities for advancement, and retire earlier.

And there you have it!

Living a healthier life not only saves your life, but can also provides you with more financial stability:

  1. Spend less money by cooking at home more and eating out less

  2. Spend less on healthcare costs (lower premiums, less on prescriptions and co-pays)

  3. Spend less on ‘normal’ sized clothing

  4. Earn more money due to being offered more opportunities for advancement, and higher salaries