What is financial health? (This is not just money, it's what you might be missing)

“Financial Health” caused a lot of sensation. But, unlike many fashions, financial wellness is definitely worth pursuing. Overall, financial health is about achieving financial stability and satisfaction with life in the short and long term. And, isn't this what we all want?

Financial health refers to a financially secure state and a sense of confidence in one’s ability to manage finances while achieving a lifestyle where one feels happy. It involves controlling your financial situation and being able to make wise decisions about money.

Financial health does not mean wealth

A high income or a huge net worth doesn’t mean someone is financially good.

In fact, even if you are far from wealthy, you have the potential to experience a high level of financial health. Financial health is not just about the amount you have, but more about how you confidently manage what you have. People with moderate incomes reside in their own means, planning and controlling financial choices usually have higher satisfaction than those with higher salaries.

Ironically, higher earners sometimes experience it More Financial pressure – quite a lot. This is often due to increased lifestyle costs, increased financial complexity, and a sense of stress that keeps the appearance or meets expectations. Without solid plans or clear value, more income may mean more worry.

takeout? Financial health is not about being rich – it's about Align. You are already ahead of the game when your funds support your goals, values ​​and peace of mind.

So, what is financial health?

The Consumer Financial Protection Agency has conducted extensive research to define conceptual frameworks for identifying and measuring financial status.

Financial health definition

Financial health is defined as a person who fully fulfills current and ongoing financial obligations, feels safe in his financial future, and is able to make choices that allow the enjoyment of life.

Your Financial Health Checklist

Achieve financial health can be divided into four different goals. Each goal has both financial and emotional aspects:

1. Control your daily (monthly) finances

The first tenet of financial health is that you are earning enough money to fund your expenses and that you can have some control over your own money. You have a budget, you can live within that budget and stick to it.

For financial health, you need:

• Stable income: Importantly, your income is stable and is expected to increase over time.
• Income exceeding the expenses.
• Good financial habits: Control means you have healthy financial habits that enable you to manage your own funds – pay bills, monitor spending and manage cash flow. You also know how to use debt if you need and avoid high interest loans.
• Sense of control: You want to feel your money, not the other way around.

2. Make money, spend and save the life you want

There are multiple ways to live, and the real purpose of true financial wellness is to help you choose your own money so that you can enjoy life on your own terms.

Financial health does not mean you can do anything at any time. This means you have the ability to weigh the tradeoffs so you can afford what really matters to you.

Financial health involves personal decisions about work, time, relationships, values, education, leisure, community, and more. For financial health, it is useful for you to know yourself:

• Target: What do you want?
• value: What is important to you?

3. Can handle financial emergencies

Everything is not always like it is today. And, bad things will happen, which can frustrate your financial safeguards. If you want financial health, you need to be prepared to deal with financial emergencies and absorb financial shocks.

There are a few things you can do to prepare for a financial emergency:

• Establish an emergency fund: First, put a portion of your income in a separate emergency fund each month. This can help you pay for unexpected expenses without debt. Emergency funds should have an easy-to-access cash account. The exact amount you need depends on your spending level and age. If you are working age, you should have at least 3-6 months of cash savings. When you retire, you may need cash, which means you are ready for months or years.
• Check out your insurance coverage: Ensure that your health, home and car are adequately insured. Check your policies regularly to make sure they meet your current needs.
• Diversify your investments: Make sure your portfolio is diversified across different asset classes such as stocks, bonds and real estate. This can help you reduce overall risk.
• There is a plan and plan B: There is a plan for how to deal with financial shocks, such as cutting expenses or engaging in part-time jobs. This can help you feel more prepared and stressed if unexpected situations occur.

Being ready to deal with everything you have will give you peace of mind.

4. Long-term financial goals are expected to be achieved

Financial peace comes from being able to bear the life you want today and the life you will be in the future. Whether you are young, want to buy a home or be middle-aged and start looking for retirement, you need a plan for how to use money and time to fund today and tomorrow.

The steps involved in achieving long-term financial goals include:

• Save for the future
• Develop and maintain long-term financial plans
• Monitor key financial metrics related to your plan
• Adjust the plan as the situation changes
• Expect to achieve goals and create obstacles to overcome problems

Formal written plans for long-term goals are an important part of financial well-being. Set up and maintain your plan with Boldin Retirement Planner.

What are the skills required to achieve financial health

Anyone can achieve financial health and effectively navigate the financial rise of life, but requires 1) baseline financial knowledge 2) good habits and 3) key personality traits.

Baseline Finance Knows How

In the United States, financial intelligence is very low. An average benchmark understanding of personal financial management methods may not be sufficient to effectively manage funds tasks.

While you don't have to be an expert or financial fanatic, you do need to have working knowledge about personal finance, which will include a basic understanding of balancing budgets, savings, investments, debts, and more.

Of course, it is also important to know how to find reliable financial information and have a framework for making financial decisions.

Good habits and financial health behaviors

Expertise is important, but getting your knowledge to work will change your financial situation. Good financial habits are important, as follows:

• Regular currency management: People who achieve financial health engage in conventional monetary management, including: budget, savings, investment, debt repayment, etc.

• Target setting: Setting goals is a way to organize success. Goals help provide power and direction.
• Financial monitoring: To achieve financial health, you want to be able to monitor progress towards your goals and track key financial metrics.
• Ability to act: This is not enough to set financial goals, you need to execute a plan.

Financial health personality traits

By fostering some of these personal traits, you can enhance your financial well-being and lay a solid foundation for your financial future.

• Be able to hold your own competition: Financial health is not an objective piece of size that fits all frames. You can decide what is important to you and set your own success measures. Financial health means you are not comparing yourself to your peers. You know what is important to you and make sure you set your own success measures.
• Self-knowledge: Understanding your attitudes and behaviors around money is an important step towards financial well-being. This may involve identifying and resolving any negative currency habits or beliefs that may hinder you from retreating.
• Discipline and Patience: Financial health requires self-discipline and must stick to budgets, save regularly and resist the urge to overspending. Being able to delay gratification and focus on long-term goals is essential for financial health.
• will: Financial setbacks, such as unemployment or unexpected spending, can be challenging. Perseverance can help you stay on track and continue to work towards your financial goals.
• Adaptability: Life is unpredictable and financial well-being requires the ability to adapt to changing environments and adjust your financial plan as needed.
• Growth mentality: Financial well-being can grow from the idea that you can improve your life.

Use Boldin Retirement Planner to Enhance Your Financial Health

Whether it’s monitoring key financial metrics, making informed financial decisions, or setting financial goals and achieving goals, Boldin retirement planners are the ideal tool for financial well-being.

At Boldin, we think there is no right decision, only the choice that suits you – your values, resources, priorities and goals. Find the path to life you want with Boldin.

Updated on May 22, 2025