Are You Financially Healthy? ​

It is commonly accepted that having a body temperature more than 98.4 degrees Fahrenheit is an indication of physical illness. Other commonly used indicators include the blood levels of important biochemical substances, like Haemoglobin, Vitamins, Minerals, Proteins, etc.

So, are there any indicators of Financial Health also? Yes, there are.

But first, let’s understand what Financial Health means –

Financial Health is the current state of an individual’s finances, based on money coming in and money going out.

Financial health is made up of three components: 

• the ability of an individual to meet regular monetary commitments like paying bills and buying household necessities.
• the preparedness to deal with any unexpected financial events, like a car accident, or temporarily losing a source of income.
• the ability and willingness to financially plan for the future and pursue one’s goals.

A financially healthy person would generally be in a better position to handle life’s ups and downs.

So, how do you know whether you are financially healthy or not?

 If your answer is “No” to any one or more of these questions, then you are not financially healthy and you must consult a financial health professional –

1. Do you spend less than you earn?
2. Do you pay your bills fully and on time?
3. Do you have a liquid fund to cover 6 months of expenses?
4. Do you have sufficient medium and long-term investments?
5. Do you have a manageable debt burden?
6. Do you have a good credit score?
7. Do you have adequate life & non-life insurance coverage?
8. Do you have a plan for your retirement?

Now you know where you stand. Are you prepared to take the next step towards better financial health?