How To Be Financially Healthy

Why Is Being Financially Healthy Important?

People who are financially healthy tend to stress a lot less about their finances and money in general. This gives them the ability to be able to focus on other things and enjoy life without the added stressors of worrying about money.

Financial health can help with stability, education, and the ability to move forward in life. However, not just for individuals, but for future generations as well. Think – generational wealth.

If you care about your health in the general sense of the word, then you should care about your financial health as well. Why? Because you should want to be healthy overall.

Statistics

• Only 28% of Americans are considered “financially healthy.” Many are dealing with an unhealthy amount of debt, irregular income, and sporadic savings habits.
• 17% are “financially vulnerable,” meaning they struggle with nearly all financial aspects of their lives.
• 55% are “financially coping,” meaning they struggle with some, but not all aspects of their finances.
• In this same survey, 44% of respondents said their expenses exceeded their income in the past year and they used credit to make ends meet.
• Another 42% said they have no retirement savings at all.

** statistical information from: https://www.marketwatch.com/

Where do YOU fall within these statistics?

5 Steps To Get Started With Being Financially Healthy

1. Realize The Need For Change & Your “WHY”

The first step in wanting to make a change is realizing that you have a problem and being ready to make the change. In order to make a huge change in life, we need convincing information, an event that rocks our world, and/or a slow gradual feeling of disgust with ourselves that blows up over time. These reasons can be so powerful that they motivate us to stay the course no matter what. This is known as the “WHY”. It’s the emotional-motivational fuel that pushes us toward completing a goal and never going back to the previous state. What’s your “WHY”? Is it for you? Your kids? To travel more or retire early? It could be simple or multifaceted.

2. Doing A Budget

A budget is like the GPS to your financial destination. Budgeting is only restrictive in regards to the amount of money you have to spend. It doesn’t matter if you make $20k per year or $150k per year; you should be doing a budget. This will help you account for every dollar.

• read: How To Get Started With Doing A Zero-Based Budget

3. Getting Out Of Debt

Getting into debt is easy, but getting out can be a different story. There is much more to life than living paycheck to paycheck just to give away all your money to someone else. Getting out of debt is one of the hardest parts of the process but it’s where you learn all the character traits to build wealth.

• read: 6 Things You Need To Do To Get Out Of Debt

4. Saving For An Emergency

Emergencies tend to happen when you least expect them. However, if you’re trying to avoid debt, this means that you need to have an emergency fund. When you’re getting out of debt, it’s good to have a mini emergency fund so you don’t run the risk of adding debt on top of debt. Once you’re out of debt, then you want to have a fully-funded emergency fund. The purpose of this is in case something happens like job loss or an extended absence from work that may result in limited or no income.

• read: Why An Emergency Fund Is A Must-Have

5. Saving For Your Future

There’s more to being financially healthy than budgeting and making sure you have money to pay your bills today and cover an emergency tomorrow. You also want to make sure that you’re prepared for your future as well. Social Security isn’t something that you should plan to rely on. If anything, look at it as a supplement to what you save on your own.

• read: Is Social Security Enough For Retirement?

Outside of having your emergency fund, investing is a good way to save for your future. Why? Because of the beauty of compound interest. To be as succinct as possible, compound interest is like free money.

• read: Is Investing Really That Hard?

By putting yourself in a better financial situation you could possibly set your family up for the path to generational wealth.

4 Principles To Help With Being Financially Healthy

1. Living On Less Than You Make. Living on less than you make isn’t the number 1 reason on this list for no reason. It’s one of the basic fundamental necessities that can help you avoid debt, save money, and prepare for the future as well as enjoy your life now. When you get a raise or come into some extra money, instead of spending it right away, take the time to think about how to use the money wisely.

2. Learning To Say “NO”. There’s nothing wrong with telling yourself, “Yes,” sometimes. However, don’t fall into the trap of not being able to tell yourself or anyone else, “No.” Thus, hindering yourself from reaching your financial goals. It’s not always easy, but having the power to say, “No,” has helped numerous people become successful in reaching their financial goals.

3. Learning To Be Content. Learning to be content isn’t something that has to be viewed as something negative. In this sense, it’s something else that can aid you in your goal of becoming financially healthy. Just as Rome wasn’t built in a day, becoming financially healthy will take more than a day. Learning to be content will help you through this process.

4. Learning All You Can About Money, Debt, & Saving. Becoming financially healthy is a process. And while we’ve shared with you some of the basics, there’s much more to it than just this. But it’s a start and now the rest is up to you!

Final Thoughts

Being financially healthy is an important part of being healthy overall as finances touch every aspect of your life. We actually came up with this topic because a friend was hosting a health fair at her church and asked if we would be interested in sharing how to be financially healthy. The information in this post is some of the information we shared with people at the health fair. It was our first time doing such a project, and if you’re interested in how it went you can read about it here.

What’s your financial health status? Where would you like to be? Are you ready to make the changes necessary to be financially healthy?

Feature Image: Unsplash