Want to Get Rich? Get in Shape

Year after year, two of the most popular New Year's resolutions are to get healthier and to improve one's finances. This is hardly surprising considering that more than half of Americans are overweight and their finances are stretched too thin. Improving these areas would be worthy goals for anyone, especially for young adults. The earlier you can correct any problems, the better your chances of a healthier and wealthier life.

But instead of tackling your goals separately, you might consider approaching them together. Health and finances, it turns out, are more intertwined than you may think.

Studies show that healthy people miss fewer days of work and are more productive on the job, so they are more likely to get promoted or earn higher salaries. "Healthy people also tend to look better, and, like it or not, a good physical appearance pays in many ways, including higher incomes," say Dwight Lee and Richard McKenzie, authors of Getting Rich in America: Eight Simple Rules for Building a Fortune and a Satisfying Life. Healthy people may choose to stay in the workforce longer, building up even greater savings and earning more interest on their money over the long term. Plus, research shows that the healthier you are, the happier you are, which has been tied to higher income.

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The association works the other way, too: Your financial problems can affect your health. Two in five people who have financial stresses report that their health has been negatively impacted by their problems, according to a 2005 study published in the Consumer Interests Annual. Those problems ranged from physical ailments such as anxiety, depression, ulcers, headaches and sleep problems to an inability to afford medical care.

"Wealth and health are mutually reinforcing," say Lee and McKenzie, "with wealth increasing the opportunities for better medical care and a healthy lifestyle, and good health increasing your opportunities for added wealth."

The cost of unhealthful habits

Unhealthful habits can cost you in a more concrete way, too. For example, let's say a pack of cigarettes costs about $4. If a 25-year-old kicks a pack-a-day habit and invests the money saved each month for 40 years earning an 8% average annual return, he could have more than $428,000 saved by the time he turned 65 -- not to mention he'll increase his chances of living to age 65 and will likely spend less money on health care.

Maintaining a healthful weight is another move that can save you money over the long term. You'll buy less food and spend less on clothes to fit your fluctuating body size say Lee and McKenzie. The money saved is better used to pad your bottom line than, er, your bottom. Learning to cook at home can also save you a bundle because you likely will spend less buying groceries than eating out -- and it even can make dating cheaper. After all, who isn't impressed by a mate who knows how to cook? (See Nine Ways to Get Ahead.)

Identify areas of your spending where you can cut back and channel that money toward productive goals. And if you can "find" some of that money by eliminating unhealthful habits, you can achieve two goals for the price of one. With the money you save, you can pay down high-interest debt such as your credit cards, then build an emergency savings fund and invest for retirement. For more information on how to evaluate your spending and make effective changes, see Stop Living Paycheck to Paycheck.

To better health and wealth

With health and wealth working in tandem, it makes sense to tackle the two issues together. These five strategies will get you on the path to achieving both your financial and physical New Year's resolutions:

1. Start small. Even the best intentioned resolutions can fall by the wayside come January 31. Why? "One reason is that self-improvement goals often seem so insurmountable," say Barbara O'Neill and Karen Ensle of Rutger's Cooperative Extension and authors of a series called Small Steps to Health and Wealth. "For example, lose 50 pounds and save a million dollars for retirement. Who wouldn't be afraid to get started?"

Better to start small than not at all, O'Neill and Ensle advise. You may not need to join a gym or employ a personal trainer. Increasing your activity level by choosing the stairs over the elevator, for example, and eating healthier by, say, avoiding second helpings for a week, are steps in the right direction. Check out www.smallstep.gov for ideas of little changes you can make that could have a big impact on your health over the long run.

The same goes for your finances. Sure, it's ideal to save 10% of your income each month. But when you're starting out, that goal simply may not be practical. Start by saving just $1 a day plus any loose change from your pockets. Then inch your way up to saving 3% of your income. That's better than saving nothing, and you can work your way up to 10% as your earnings increase. Learn how little financial tricks can save you money and see how quickly even small deposits can add up.

2. Put your goals on autopilot. Worried that your resolutions will come undone over forgetfulness or laziness? Put your behavior on autopilot, and you won't have to give it a second thought. For example, automate your health regimen by resolving to work out with a friend -- you can keep each other on track. Or modify your behavior and incorporate it into your daily routine, such as eating off a smaller plate to control portion size or getting off the bus a stop early and walking.

Putting your finances on autopilot is also a great way to stay on track. You can ask your employer to automatically deposit a portion of your paycheck into your savings account instead of checking account. Set up an automatic investment program with a broker or mutual fund company. T. Rowe Price, for example, will let you in for as little as $50 a month. You can even set up regular payments for your credit cards, utilities and phone bills.

3. Pace yourself. "Studies have shown that when people are served more food, they eat more," O'Neill and Ensle say. This results in higher calorie and fat intake. Similarly, with your finances, you may be offered a high credit limit or a larger loan than you need, leading you to charge more than you can afford just because you can. In either case, don't bite off more than you can chew.

4. Avoid quick fixes. Sure, we'd all love to have a bank account like Bill Gates and a body like The Rock or Angelina Jolie. But it's not going to happen overnight. When it comes to losing weight, getting in shape, building wealth or getting out of debt, you need discipline and perseverance. Don't rush to put your health (and money) in the hands of the latest diet, miracle pill or surgery. Instead, work with your doctor to come up with a practical and wholesome solution.

Similarly, keep your finances on solid ground by avoiding red-flag financial claims, such as products that guarantee unbelievable investment returns, those that downplay risk versus reward, and those that pressure you to invest money quickly or pay high fees in advance, O'Neill and Ensle say. Also, think carefully before you bail out of your financial troubles by declaring bankruptcy. It can stay on your record for ten years, making it nearly impossible for you to get credit or to buy a car or a house, among other things. See Climb Out of Debt Faster for help lightening your load.

5. Check your progress regularly. When you're young, the need for routine medial exams may seem like a waste, but it's time and money well spent. Detect or prevent a problem early and you increase your chances of resolving it faster and cheaper than if you allowed it time to worsen. Putting off regular exams to save money could actually backfire and cost you more in the long run, say Lee and McKenzie. Make sure you see a dentist, eye doctor and medical physician regularly.

You also need regular financial checkups to uncover potential problems. It's a good idea to re-evaluate your budget and spending habits at least every six months, as well as examine your short- and long-term financial goals to make sure you are on track. (Learn more about how to set financial goals and reach them.) You should order a free copy of your credit report once a year to make sure it's in tip-top shape. Look at your insurance coverage -- and re-shop your policies -- at least once a year to make sure you are getting the coverage you need at the best price.