The Homeostasis of Personal Finance
When you think of homeostasis, it is likely that personal finance doesn’t come to mind. So why am I using a term from ninth-grade biology class? To answer that question, let’s review what we learned about the body back then. In 1865, Claude Bernard defined homeostasis as “maintaining a constant internal environment.” In other words, our bodies remain in a constant and stable internal state despite changes in the external environment. The body regulates:
- Body temperature
- Blood pressure
- Water levels
- Sugar levels
You’re probably thinking, “Why are we comparing homeostasis and personal finance?” Well, just like your body is in best condition when it maintains a stable and constant state, so are your personal finances.