Personal Finance Lessons from Jars of Henna for My Hair

While tinting my hair, I have acquired new views on diversification, financial oversight and due diligence. Three jars of natural, plant-based Henna dye have taught me a lot about investment, money management and frugal living.

Here's my story. I have great hair and a healthy attitude about aging. I'm 50 and I'm proud. I work out (weights, treadmill, yoga), my face in unlined, and I've learned to make peace with past mistakes and ongoing imperfections.

But my hair has gone gray in a weird fashion. Most of my head is still dark, but I have these odd, odd patches of gray. Henna, a natural dye fashioned from a plant, has been my safe, do-it-yourself fix for my faded hair color.

Here's what I have learned about hair coloring and personal finance:

• Know your risk profile: I am suspicious about most commercial hair dyes. The disclaimers and the long list of chemicals scare me. The reward of complete gray coverage does not adequately compensate me for the risk of chemical exposure. Quite simply, the risk-reward ratio does not meet my risk-adverse personality about health. Therefore, I have opted for a natural henna dye. Likewise, when putting together my investment profile or personal finance plan, I have to make sure that the risk-reward ratio fits my personality. And when it comes to that ratio everyone has a different breaking point.

• Diversification: I mix powder from three jars of henna to develop the right portfolio for my hair. From light brown to a dark Persian blend, the customized mixture provides a rich blend of natural color with a few highlights. When I used just a single jar of one color (black henna), I was not happy with the color. It was flat and unnatural. But diversification provided the right fix of color. Likewise, for my 401k investment plan, I've tried to create a blend of at least three funds, with a variety or risk and riches.

• Do your homework: In the investment world, they call it "due diligence." It's our responsibility to investigate the chemicals that we apply to our skin and hair, and the investment tools that we apply to our money. Don't take any one's word. Don't accept incomplete or dubious (so-called Black Box) explanations about how a process works. Investigate and digest how financial and beauty processes work.

• Conduct a patch test: All hair dyes (natural hennas and traditional hair color products) recommend a patch test. That means that you apply the product to a small area of your hair or skin for an early evaluation. You want to test for allergies, color and suitability. The same principle applies to money. Test a new fund manager or investment style with a small portion of your funds before committing to a large amount. Look at the past track record and examine the short-term/long-term gains of the investment style before moving forward.

• Know your limitations: I have long, thick kinky/curly hair, which is not a limitation. But my hairstyling talent is the limitation. Given the thickness of my hair and my styling talent, it's been frustrating, messy and defeating to apply henna to my entire head at once. What's more, I have had very poor and short-lasting results when I tried the all-in-one approach. Through trial and error, I've learned to work on small sections of my hair at a time. During one session, I applied henna to one area only. In a later session --maybe a few days or a few weeks later -- I will work on another area of my hair. With this approach, massaging in the product and rinsing it out has been so easy when I limited the task to one section at a time. With money and financial goal-setting, I've learned to operate in baby steps. During one session, I'll focus on the monthly household budget and during subsequent planning sessions, I'll work on college-savings plans or retirement goals. I just can't do everything at once.

• Green isn't everything: The black henna dye proved to be a problem for me. Quite simply, the black henna gave my hair a dark green glow. A head of black, dark green and graying hair was not appealing. Green is not everything. The softer henna colors --dark, medium and light browns -- did not offer complete dark coverage, but at least I did not look like an evergreen tree. Likewise, green money is not everything. Life has different colors and sometimes, we have to make compromises in spending, saving and investing to find a financial plan that matches our world view and lifestyle.

• Do it yourself: My henna-colored hair costs about $2-$3 per session, and I don't have to pay tips, parking fees or other travel expenses. The do-it-yourself box kits cost $6 to $15 per session and a salon visit to a professional colorist can cost $50 to $250 and higher, which can translate into thousands a year for color maintenance. Obviously, the DIY version is much cheaper. With money, we all need to be DIY investors even if we have professional stockbrokers or financial planners. Even with the expertise from a professional, we need to provide layers of DIY oversight. We have to cover our own assets with the right questions and constant scrutiny. The buck really stops here.

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