If You Don't Lose Weight Your Finances Will

by Jennifer Openshaw
Wednesday, April 21, 2010provided byhttp://www.marketwatch.com/news/default.asp?siteid=yhoo&dist=yhooSnapshotLoghttp://www.marketwatch.com/news/default.asp?siteid=yhoo&dist=yhooSnapshotLog
Studies show normal-weight folks earn more money and have more savings
You have to admire Michelle Obama for taking on an issue that can turn off millions of Americans, who themselves are overweight. From better food labels to more money for healthier foods in schools, the First Lady is taking on the issue with a vengeance, tackling the problem from many corners.
But there's another, big reason that each and every parent should get rid of excess weight and teach their kids good eating habits: our financial futures.
Now, you might argue that eating at McDonald's is a lot cheaper than making burgers from scratch -- and it does save you time -- but that's hardly a reason to run for the Golden Arches.
Now, mind you, I love good things. People call me a foodie. But I try to battle the bulge with modifications here and there and a lot of exercise. As a friend once said, echoing my thoughts, "I exercise so that I can have dessert."
So if you're wondering if you should put your kids on a diet -- even if you can't seem to tighten your own belt -- then consider these costs that will add to their financial security - or lack of it - over time:
Food. By definition, someone who's overweight is consuming more calories. I don't care what it is, but another 1,000 calories with a high concentration of fat -- say, just one brownie sundae with whipped cream -- can cost you another $6. And that doesn't count the bags of chips and god knows what else. That $6 a day you munch consumes a whopping $143,000 from your nest egg over 30 years, assuming just a 5% annual return.
Illness. According to a Rand study, obese people spend 36% more on health services than people who are normal weight -- everything from co-pays to prescription drugs. That's no surprise. Overweight and obese people tend to suffer from a higher incidence of chronic disease, including musculoskeletal disorders. The result? "Recovery from any given injury or illness is likely to be more difficult and more expensive than for normal-weight individuals," says Claire Wilkinson, director of global insurance issues for the Insurance Information Institute. That means more physical therapy, more time off the job and higher medical bills overall.
Life Insurance. Looking to protect your kid if something happens to you? It'll cost you more if you're heavy. The longer you're likely to live, the lower the chance that an insurance company will have to make a payout on a claim. Obese people live on average 7 years less, so life insurers have to account for such differences in their underwriting. "For this reason, life insurance for overweight and obese people generally costs more than for normal-weight people," says Wilkinson. "Insurance companies take into account a lot of different factors when they're quoting you with a rate," she adds. "Things like family history, healthy weight, and whether you exercise regularly may enable you to qualify for a more favorable rate class." In group life insurance plans, while age, smoking and even gender can impact rates to individuals, obesity isn't used as a factor, at least not yet.
Earnings, Net Worth and Marriage. You've heard the studies that show better looking people earn more. Being thin helps too. A study by the Ohio State University Center for Human Resources Research found that the obese accumulate only about half the net worth of non-obese Americans, and gender and ethnicity make a big difference. Overall, a one-point increase in body mass index dropped net worth by $1,300. But wealth increases are nonlinear; that is, a 10-point change from a highly overweight reading means much more. (by the way, to learn more about BMI and calculate yours, go here http://www.nhlbisupport.com/bmi/. Now for earnings: The Ohio State study found that a typical woman earned $314 less annually for every one-point increase in BMI while a male counterpart earned $161 less. Another study by a New York University sociologist found that, for women, a 1% increase in BMI led to a 0.6% decrease in income, a 0.4% decrease in job "prestige" and a 0.35% decrease in the likelihood of marriage. To keep this simple, assuming this is true, just a one point increase in a man's BMI could lead to a drop in savings over 30 years by as much as $10,700 (assuming a 5% annual return if these earnings were not otherwise lost), while for a woman, a savings impact of over $20,000.
It's easy to blame fast-food giants like Kraft and McDonald's for the obesity issue. But it all really starts with good habits. And that comes mostly from Mom and Dad.
Jennifer Openshaw, founder of the original Women's Financial Network, is author of "The Millionaire Zone ." Through SuperFutures.org , she offers a youth leadership program at the United Nations to help teens. You can find her on Facebook, Twitter @jopenshaw or email at jennifer@familyfn.com
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