5 Ways Being Overweight Costs You Money

Obesity is not only cost to your health, but being overweight also has adverse implications on your finances. Apart from the obvious medical expenses associated with treating health conditions such as diabetes and high blood pressure arising from being obese, here are 5 nonmedical ways being overweight costs you money. Loss of income Lost wages…

Obesity is not only cost to your health, but being overweight also has adverse implications on your finances. Apart from the obvious medical expenses associated with treating health conditions such as diabetes and high blood pressure arising from being obese, here are 5 nonmedical ways being overweight costs you money.

  1. Loss of income

Lost wages are the earnings an employee does not receive from their employer because they missed work or were unable to work for one reason or the other. This is lost time, and since it was unproductive, it can not be compensated. An overweight person is bound to lose productive time because of absenteeism when seeking medical attention. This is a loss of income that can be directly attributed to being overweight.

  1. Lost e-learning capacity

Overweight employees suffer short-term disability resulting from the toll of health complications on the immune system and the physical strain on the patient's anatomy. This subjects you to early retirements, translating to less income in wages and benefits due to the incapacitation. Consequently, if you remain in employment, the productive hours are bound to reduce and a resultant decrease in quality since hampering your ability to earn income equivalent to your full potential.

  1. Higher cost of products

Manufacturers and designers develop products for the masses so as to benefit from the economies of scale which significantly reduces the cost of the product, enabling more people to afford the product. However, overweight consumers require a distinct category for most of the products, and this not only defies the economies of scale, but it also limits the options available and equally call for the use of more / unique material. Costs incurred in the development of this special category are transferred to the consumers. Therefore, overweight people pay more for their products as compared to the other body sizes.

  1. Weight management

Weight management requires the commitment of resources, and this can be costly to your wallet. The cost of purchasing weight-loss programs, gym membership, acquiring personal trainer or nutritionist and obtaining special diets are some of the initial costs that you will encounter. Later costs will arise from the need to purchase a new wardrobe if your weight management indemnavor yields positive results.

Alternately, doing nothing about your weight is also costly because it stems from a habit of overindulgence, and addiction and these habits are still expensive and extravagant to maintain.

  1. Social

The most unfortunate nonmedical cost of being overweight is the social impact of your weight on your ability to earn income. Discriminatory cases in the workplace have been reported towards people who are obese. The discriminatory tendencies including social exclusion not only harm the victim's self-esteem and confidence, but the psychological impact hampers their productivity leading to reduced productivity and efficiency. This hurts their chances of promotion and hence limits career advancement. Consequently, other employees, including the manager may intentionally avoid assigning responsibility to an overweight person because of the lack of trust in the individual's commitment and fear of replication of the same in their job duties.

How Stress Affects Your Wallet

Worry and anxiety are probably the most operative words usable as descriptive vocabularies of the term stress. Do you have fear or anxiety clogging in any sphere of your life? Do you have professional or job-related stress? Concerns about your retirement? Anxiety about whatever's in store for the coming year? Or concerns about your personal…

Worry and anxiety are probably the most operative words usable as descriptive vocabularies of the term stress. Do you have fear or anxiety clogging in any sphere of your life? Do you have professional or job-related stress? Concerns about your retirement? Anxiety about whatever's in store for the coming year? Or concerns about your personal relationships with your friends, fiancé, or family members? All these worries and anxieties have a significant impact on your wallet. Stress can either bolster your financial wellbeing, or it can licit an adverse outcome on your financial well-being depending on the context of the dilemma.

Positive impacts of stress on your financial wellbeing

  • An anxious mind tends to think about the possible solutions to the looming predicaments. Ergo, when you are stressed with bills in your house, the brain develops a scheme that will provide cheaper alternatives that are cost-cutting, hence more savings. The survival instincts that kick in when worry occupations can be very effective reality checks to your expenditure.
  • Stress gives you the motivation to work harder and earn more money. When you are concerned about your life after retirement, or about how you will provide for your children adequately, you become driven and strive to generate more income so as to be financially stable later on in life.

Negative impacts of stress on your financial wellbeing

  • Stress has a negative impact on your physical and mental well-being; the two key components of human productivity and hence ability to earn. The decreasing mental and physical health culminate to taking sick days off, lack of focus and hence reduced efficiency, quantity and quality of output, therefore, hurting your income.
  • Psychological conditions attributed to stress require either the therapeutic intervention, or pharmacologic management, or both treatments. Treatment of these mental conditions is cost and can irreparably eat into your wallet.
  • Anxiety and other symptoms of depression also affect your level of productivity and ability to earn income. Depressive symptoms such as low self-esteem and poor grooming and hygiene reduce your confidence and interpersonal skills significantly leading to a reduction in your productivity and ability to achieve your full potential and earn income from the same.
  • Poor mental health impedes prudent decision making leading to impulsive expenditure and unsound financial management. These are detrimental to your overall financial being as they result in increased costs, missed opportunities for more income and waste of dollars.
  • Stress can also lead to depressed tendencies, including self-deprecating behavior, especially overindulgence in addictive behaviors. Overindulgence entails high expenditure in unnecessary deeds, sometimes leading to addiction which joins further costs.
  • Your concern over the prevailing conditions shows a lack of satisfaction since the need for a better position or results. This stress emanates from the need to fit in, you may blow your hard earned money so as to appeal to a particular class and this can lead to accumulation of debts that are unhealthy. The desire to change the prevailing conditions can result in extravagant expenditures that are unsustainable at your level of income.

Why People Rarely Get Rich Quick

The world looks like a huge ball full of endless opportunities to get rich but still millions, if not billions, of people are stuck in poverty. While some cases may be argued as sheer bad luck or misfortune, most people are simply not making rich because of various factors that will be highlighted. Most people…

The world looks like a huge ball full of endless opportunities to get rich but still millions, if not billions, of people are stuck in poverty. While some cases may be argued as sheer bad luck or misfortune, most people are simply not making rich because of various factors that will be highlighted.

Most people do not become rich quick because of the failure to balance the paradoxical process that is full of contradictions, requiring a strategic balance of the various elements.

  1. They never plan

Without a plan, and without sticking to the plan, becoming rich becomes a moving target or a wild goose chase. Most people do not become rich quick because they just lack the plan to take them there. Whereas plans can be subjected to turbulence, they provide goals and contingency approaches of achieving these goals or salvaging the entire venture if things become unbearable. Without a plan, and without goals, nothing can ever be completed, and you will keep on starting all over again every other time.

  1. They procrastinate

The best time to start acting on your plans is now. Most people, however, postpon their plans until it all remains as a thought that can never be actualized. Without starting, you can never know the challenges and neither can you come across the opportunities and since becoming rich for these people is also postponed.

  1. They never invest

We have all heard of hardworking employees who retire without a penny in their retirement accounts and have to continue working for their daily maintenance in their retirement ages. It becomes impossible to get rich if you only depend on one stream of income known as linear income. Linear income requires that you get a job done for the payment to be effected and since without working, there is no stream of money. On the other hand, passive income is the money earned from investments that give a return without you having to step in the office. Passive income is the equivalent of making your money to work for you as opposed to you working for the money. Most people will keep on working but will not experience their financial breakthrough because they do not make investments that will enable their money work for them.

  1. They lack intention

Intent is masked in several facets including ambition, accountability, and responsibility among others. The process of becoming rich is an intentional journey that must be followed to fruition. It means that you will take responsibility and remain accountable to yourself, and even when faced with obstacles, your ambition will drive you through up to the realization of your goal. This requires a balance between courage and foolishness, and patients and grabbing opportunities. Most people who do not become rich quick simply lack the ability to persevere and exercise restraint while others exercise restraint and perseverance enough till they miss the chance or get 'burnt.'

How Do Credit Card Companies Make Money?

Credit cards have gained much popularity in India over the last few years. Public sector banks as well as private banking institutions have come forward to launch a host of credit cards suiting customers with different types of needs. HDFC Credit Cards and SBI Card are the two companies with the largest market share. While…

Credit cards have gained much popularity in India over the last few years. Public sector banks as well as private banking institutions have come forward to launch a host of credit cards suiting customers with different types of needs. HDFC Credit Cards and SBI Card are the two companies with the largest market share. While banks are ready to offer you with a small loan in the form of credit cards, have you ever wondered how these banking institutions make money from these ventures?

The three main ways how card issuers make money is through the annual fee of the card, interest charged on late payment, penalties on skipping EMIs, etc. At the same time, they also earn from the businesses that accept these cards. Businesses are required to pay transaction fees to the banks which also makes up for significant earning of the card issuer banks.

But before we dig deeper into how they make money, let us first understand the term 'Credit Card Companies'. It is easy to get confused between credit card issuers and credit card networks. An issuer is the bank or financial institution from which you take the card. You are taking a loan from the card issuer and paying back to them. A credit card issuing company is usually a bank. On the other hand, credit card network refers to companies that process the transaction. Currently, there are three major networks in India- VISA, Master Card and RuPay. Apart from these, American Express and Discover cards can also be found.

So, when you make a transaction with your credit card, your money moves electronically from your bank through the network to the merchant's bank.

How do credit card companies make money?

As mentioned above, your bank makes money majorly from you and also from the merchants where you use the card issued by the bank to make the payment. Banks or financial institutions make money in the form of-

Fees

Banks charge different types of fees from their cardholders- some fees are to be paid by everyone whereas other types of fees are levied on condition. Let us talk about these fees and charges-

  • Annual Fees- You have to pay annual fees towards your credit card, especially when you are an elite cardholder and enjoy higher benefits than normal users. This is to be paid by all users. However, some banks may set a condition of spend based annual fee reversal scheme.
  • Cash Advance Fees- When you withdraw money from an ATM using your credit card, the bank charges a minimal fee for it which is normally correlated to the amount you withdrawal. This is also included in the card issuer's earnings.
  • Late Fees- Your card issuer charges fees from you if you delay your EMI payments. Banks make more money from late payers in the form of late fees.
  • Balance Transfer Fees- When you transfer outstanding balance from one card to another, the bank charges fees from you which again becomes its earnings.

Interest

The bank or financial institution has just gifted you a credit line. You have to pay the interest for the loan that is offered to you in the form of credit card. This interest cost adds to your expenses and is a method of approaching for the banks. Interest on credit card is charged on daily basis for as long as the amount stands outstanding in your account. This is why experts always advise you to pay the total outstanding amount in full every month because interest will accrue on any amount that stands unpaid.

Let us understand this with the help of an example. Suppose the billing date is on 4th of every month and payment due date falls on 29th of every month. APR = 24%

  1. 10th March- Apparel Shopping- Rs. 5,000
  2. 13th March- Bill Payment- Rs. 2,000
  3. 19th March- Gadget Purchase (converted into 6 month EMI) – Rs. 12,000
  4. 22nd March- Dining Bill- Rs. 1,000

Now considering that the person does not have any outstanding amount from the previous bill, he will have to pay Rs. (5,000 + 1,000 + 2,000 +2000) = Rs. 10,000.

This will be the total amount due on 29th March. Now if the person chooses to pay only Rs. 6,000, the remaining Rs. 4,000 will accrue interest for each day until the amount is paid in full. Considering that the user again pays Rs. 2,000 on the 10th of April, let us see how interest cost works out-

Interest = (outstanding amount x 2 percent per month x 12 months) * (number of days) 365

In this case, the total interest charged would be Rs. 52.60 which is a total for Rs. 4,000 that lies outstanding for 11 days and Rs. 2,000 that lies outstanding for 18 days until the next payment. This is the reason why those who only pay minimum amount due tend to fall into debt sooner sooner. Cardholders should also note that when an amount is outstanding in your statement, the new purchases that you make are not eligible for the interest free period. This is why interest charge is the easiest way how banks make money out of your credit card.

Interchange Fee from the Merchant

When you use your card at a merchant terminal, the merchant also pays a percentage of the amount to the bank as processing fees. This will also be added on to the bank's earnings. It usually ranges between 1 to 3 percent of the transaction value but may differ from merchant to merchant.

How to save yourself from paying too much to the bank?

Savvy customers plan their transactions and payments in a way that they have to pay the least amount to the bank. These are the habits you can adopt to cut your costs-

  • Pay your entire outstanding balance every month; just pay the minimum amount due is not a good practice.
  • Set alerts for your payment due dates to avoid missed payments which entail late fees.
  • Create an emergency fund to replace costlier options like cash advances from credit card.
  • Choose low annual fee or free credit cards and even if you select a card with high annual fee, make sure that the rewards are worth it.

The Power of Thrift

“Thrift” comes from the verb “to thrive”. To thrive means to flourish, grow vigorously, to gain in wealth or possessions, to progress towards or to realize a goal in spite of or because of circumstances … “(Mirriam-Webster dictionary) In other words, thrift is not so much as cutting down or not spending money. It's about…

“Thrift” comes from the verb “to thrive”. To thrive means to flourish, grow vigorously, to gain in wealth or possessions, to progress towards or to realize a goal in spite of or because of circumstances … “(Mirriam-Webster dictionary) In other words, thrift is not so much as cutting down or not spending money. It's about being careful in your behavior so you can reach your goals, be happy, successful and prosperous and live your best life without unnecessary financial stress.

The three scarce resources

In life, there are three scarce resources which need thrift management to achieve your goals, objectives and dreams. And no, money is not one of these scarce resources, at least not directly.

Time, Health and Energy

These are the three resources that are finite in this life. You can only use them once. They are non-renewable. So be careful how you spend them!

The thing about time, health and energy is that you do not know how much of each of these scarce resources you have left to you. It's impossible to know how long you'll live, how healthy you'll be in your later years and how much energy you'll have. And all of these factors have a direct effect on how much money you're going to be able to generate during your lifetime.

Money is time

People often say that time is money, but, in reality, the reverse is true. You trade your time, your health and your energy to generate money that many people then squander unnecessarily on things they do not really need and often do not even bring them much enjoyment. Every time you make a spending decision, you're committing yourself to working more days, months and years in a job that sometimes you do not even like to get your bank balance back to where it was before or to move forward financially.

Selective spending

Given this, when you spend money on non-essentials, make sure that the enjoyment of those things bring you more than offsets that extra time that you'll have to dedicate giving away at that day job! When you spend money, you're really spending your finite resources of time, health, and energy which are in diminishing supply. Just because paycheck comes in at the end of every month does not mean it's going to last for ever. Jobs come and go, you get old, sick and tired. And there will be a time when you'll have to live only on what you have not spent and have saved up instead of just spending next month's paycheck. State pensions are unreliable at best and they're kicking in at an ever more advanced age – 65, 67 years old or even more by the time you get there.

Work ethic

Thrift is closely linked with work ethic. Some historians tell us that Protestants in Northern Europe in the sixteenth century developed an ethical of hard work as benefitting both yourself and society as a whole. The concept of thrift went hand-in-hand with this. After all, if you're working hard for your money, it makes no sense to squander it. There have been various counter-arguments as to where and when all this really started, but for our purposes it's unimportant. The concept is still just as valid, where it came from.

Entitlement

The mentality of entitlement is almost the exact opposite of thrift. Entitlement is where we absorb we deserve things but without having to work too hard to get them. In reality, just because we went to university or did well at school does not mean we're entitled to a comfortable way of life with all the luxuries and conveniences of the 21st century. You could even say there's no such thing as rights if you do not accept the responsibility to work hard to get them. Of course, I'm talking in the sense of material possessions, not clean affordable drinking water or free education to the age of 18 which I regard as basic human rights.

Bad habits

Every time you put a cigarette in your mouth, drink too much, even exercise too strenuously you're squandering your health. Every time you spend a whole evening watching rubbish on the television or even sleeping too much, you're wasting time that you could use in a better way. And every time you waste energy on things that do not bring you real enjoyment, you're throwing away the chance to use that energy on more important things.

Conclusion

Richard Quest in his financial program on CNN always finishes with the words, “And whatever you do, make sure it's profitable.”

Enjoy yourself but be thrifty with your finite resources. Be selective in how you spend them, get the largest bang for your buck and make them last you as long as possible for the rainy day that's bound to come along at some time or another.