Sugar Highs and Financial Lows

World Bank President, Robert Zoellick, warned economic policy makers recently that the stimulus packages countries are using to artificially prop up their economies create sugar highs that are not sustainable.

“Right now, the international system appears to have a sufficient amount of stimulus,” Zoellick said. “The danger is if you spend too much government money, you create a different problem.”

That problem is inflation. Expectation inflation. Price inflation. Wage inflation. Cost inflation. “Bail me out, too!” inflation.

The problem with a sugar high is that it is followed by a sugar low. the “crash” that happens when there isn’t enough glucose in the blood stream. Scientists may debate whether sugar highs and lows exist, but parents experience them quite frequently (mostly after a trip to the grandparent’s home).  Zoellick is concerned that we’re on the way to overstimulating the world’s economies just like sugar can overstimulate a child (or adult).

How Can You Avoid A Financial Sugar High and Low?

1. Eat the granola of steady, consistent savings.

2. Eat the vegetables of fully capitalizing your emergency fund.

3. Drink the unsweetened green or black tea of paying off high interest debt.

4. Eat the fresh fruit of using broad based index funds for your investing.

5. Eat the whole grains of having the proper amount and types of insurance.

6. Eat the raw almonds of staying away from temptations to spend.

7. Drink the pure, filtered water of learning how to make extra money.

8. Eat the fresh, lean meat of creating and using a budget.

9. Eat the blueberries of putting aside some money for your child’s college education.

10. Eat the spinach of giving to a cause you believe in.

There really isn’t anything wrong with sugar per se, at least not when used in moderation. The problem is that a “moderate amount” is so easily exceeded, much like credit! Then you end up with that sugar high, followed by a sugar low when the bill comes due.

But ANYTHING can be abused and overused, even super foods. Too much of any one thing, even things that are good, can throw a monkey wrench in the mixer.

The key is moderation and balance.

What’s your take? What other important personal financial issues should be included in our “diet?”

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