After publishing my post on why personal finance never ends, a couple of readers were amazed at the correlation between weight and money. I am too—the parallels are striking.

The issue has been covered thoroughly by other personal finance bloggers, but I thought I’d revisit it directly from my perspective and tell you why I think the connection is so strong, and the principles so relevant to money management.

My Weight Story

For many, sharing stories about their weight is as taboo as talking about money. I have no issue with either, so I’m going to tell you a bit about my weight loss journey today.

Like most people who struggle with weight, mine has been like a yo-yo or stock chart for the better part of the last 10 years. I’ve dug in deep on two occasions to make a difference—once about 3 years ago where I had very good success, and most recently over the last six months, where I’m about one-third of the way on my journey down to what will hopefully be a permanent healthy state.

The commonalities between success with money and success with weight were clear to me, almost from Day 1. I’m a big believer (if such things needed belief in the first place) in natural law—that certain principles govern the consequences of our actions, and that we cannot directly control those consequences.

Let’s take a look at some of those:

Simple Math Rules the Day

When you really get down to it, both weight loss and success with money are governed by a simple equation of in-vs-out. Burning more calories than you take in results in weight loss, while burning less than you take in results in weight gain. Everything else is just gravy to make this process take place.

Spending less than you earn results in discretionary income and money you can put away for the future. Spending more than you earn results in growing debt and deteriorating finances.

It’s Gradual

You may have heard the expression “there’s no free money,” meaning that you have to work, and work hard, for the money you’ll make. Well, “there’s no free weight loss either,” though people will claim you can lose 10 pounds in 2 hours every day of the week on TV.

Weight loss has a safe, accepted medical limit of 2 pounds per week. Unlike weight loss, money has no magic rate limit, but the principles of avoiding getting-rich-quick schemes still apply.

It’s Not a Straight Road

In a society that values goal-setting and achievement, we seem to think that the journey from point A to point B, in anything really, is a straight line. In reality, it’s more like a suburban community—hard to get in, hard to get around, and nearly impossible to escape.

People deal with the ups and downs of weight loss in different ways—some will look at long-term averages for a better gauge of progress, others will get discouraged. There’s no one right way, but it’s important to accept that setbacks will happen.

Plateaus Happen, Approaches Change

One of the most frustrating things about weight loss is a plateau. It’s what happens when your weight loss levels off after weeks of progress, and nothing you do that has worked in the past seems to get you through it. At this impasse, most people suggest changing your approach—increasing or changing the type of exercise you do, or watching your food more carefully.

The same can be said of money—it might seems like weeks and months go by and we’re spinning our wheels. Changing your perspective or trying something completely new seems to do the trick of getting things rolling again.

Over the Long Term, Small Amounts Matter

An extra 25 or 50 calories a day might seem like no big deal over the short-term, and you probably wouldn’t notice the difference even if you weighed yourself every week. But over the months and years, your weight would continue to creep up, until you wake up one and find yourself overweight again.

In the same way, a small latte or buying lunch every day, or spending just $20 more than you’ve earned every month might seem like no problem at all. But sooner or later, over the course of your life, those small overages start to add up and start causing real pain.

Planning is at the Core

My particular cup of tea for weight loss is WeightWatchers, but the idea is the same no matter what “system” you set up for yourself. Depriving yourself completely results in breaking the system sooner or later, so you need to allow for flexibility. In WeightWatchers, this is known as “weekly points.” If you’re aware of things happening later in the week that will affect your eating habits, you need to make changes earlier on in the week.

When designing a home budget, a similar level of flexibility needs to exist to do both “fun” things and to account for things that are unexpected. The same kind of planning must take place when unusual expenses are planned that month.

Real Life Happens

When setting out on the journey, we imagine that our path will be straight-lined, simple, and free of distractions. Then the first obstacle happens, and the second, and the third—and soon, we’re feeling like the finish line will never come.

With money, just like with weight loss, real life is part of the process, not an afterthought. Certainly, it makes things tougher—but then again, no one said it would be easy, did they? (Well, except that guy on TV at 1 in the morning…)

The Science and Tools Evolve, the Principles Don’t

WeightWatchers comes out with their latest points system. Mint releases their newest money-tracking features. The new food “pyramid” guidelines are released. Vanguard debuts 15 new index funds to invest in.

Progress is inevitable, and good. It incorporates the latest knowledge of what’s worked, the latest technology, and the newest research. But at the end of the day, weight loss and money are still about in-vs-out. You can’t make your tools fix your basic problems for you!

Many Ways to Skin the Cat

I can go to diet meetings, or I can use some online tools. I can take advantage of technology or calculate using books and paper. I can count the smallest protein or carb I put in my mouth, or I can switch to healthy foods and eat until satisfied. Everything moves toward the same result, using a widely different approach.

You don’t have to chase the latest piece of software to be successful with money. But you do have to find something that works very well in your own life and stick with it.

Maintenance is Just as Hard

If you plan on dieting for a while, reaching you goal, celebrating, then returning to your old habits, chances are you’ll just gain all the weight back, and more. What a wasted effort. The key, I think, isn’t the journey, but the maintenance once you get there.

I touched on this last week, so I won’t beat a dead horse—personal finance never stops. No matter what life stage or level of financial mastery you’ve achieved, you need to take care of your money because it could be gone tomorrow. Just like with weight, it might be the “little leaks” that get you, not a big event.

Do You See Others?

So there you have it—pretty compelling reasons why dealing with money is remarkably like dealing with weight. I think the understanding will bring all of us closer to being able to reach our goals.

Have I missed some aspects of weight that could apply to money? Feel free to add your own in the comments.

Photo by bark