Do you know how your financial health rates? If you don’t, it’s time that you find out. Financial health is just as important as physical health. In fact your financial health could be impacting your physical health. Worrying about your finances or not being in the best financial health, can lead to stress, depression and other physical ailments. Just like with your physical health, you have to determine where you are so that you can improve your condition.
To determine your financial health I have identified 3 stages: Financially Fragile, Financially Transforming and Financially Stable. These stages apply to ALL income levels. Everyone falls somewhere within these 3 stages and may spend some time in each stage and that is perfectly ok. Knowing where you are helps you to identify where you want to go and develop a strategy to get there. Let’s take a look at each stage.
Financially Fragile
You are in the Financially Fragile Stage if:
Your finances are currently unstable and one unexpected financial event can cause a significant financial setback.
· Lack of financial awareness
· Unclear on financial direction
· No financial strategy
· Always waiting on the next paycheck
· More month than money left
· Unclear on the drivers of your financial decisions
Financially Transforming
You are in the Financially Transforming Stage if:
You are moving away from fragile but not quite stable. Still working through the causes of the last stage, fragility.
· Growing in financial awareness
· Gaining clarity on your current financial situation
· Gaining clarity on your money choices/mindset/habits
Financially Stable
You are in the Financially Stable Stage if:
You are consistent financially.
· Clear on financial direction
· Have a financial routine
· Not waiting on the next paycheck
· Consistently working financial plan for at least 1 year
The goal here is to reach the 3rd stage Financially Stable. Being financially stable creates the opportunity to achieve your financial goals no matter what they are.
Just like navigating the stages of physical health sometimes requires a doctor, navigating the stages of financial health sometimes requires a personal finance professional. If you are interested in improving your financial health with the assistance of a personal finance consultant, sign up for a FREE consultation.