Financial health means different things to different people: for some, it is low or no debt while for others, it is high income that caters to their everyday needs and wants and allows them to save and invest for the future.
The variation in how people measure their personal financial health is only natural given the fact that, personal finance is deeply personal and is open to different interpretation.
While there is definitely no one set metric, be it income or net worth, there are some general signs that you can use to tell if you are financially healthy:
1. You know where your money is GOING
In order to make your money work for you, you must know where it is and what it is doing. You can do it the old school way, with pen and paper or maybe use an excel spreadsheet and free to use tools like Mipango App.
It does not really matter what tools or method you use. What matters is that you avoid regular occurrences of moments of wonder, where you think to yourself, ‘Hata sijui pesa yangu imeenda wapi!’
You know those moments right? When you can see that your account is on zero but you are not sure where the money went.
2. You look beyond TODAY
Another sign that you are financially healthy is that you are focused on the future. You can be focused on the future by simply doing one or more of the following:
- Having a financial plan and have set SMART goals
- Having an emergency fund
- Learning about investing
- Planning for your retirement, as far off as it may seem
3. You commit to LEARNING
The good news is that you don’t need to be a financial expert to be financially healthy. In fact, even the people who are good with money know that they do not know everything about money. However, what they do, is commit to learning and you too can do the same.
You can commit to learning by subscribing to communities that provide personal finance management resources like Skillfully Conversations.
Or signing up to Personal Finance Training and Coaching. Or maybe scheduling or hiring a Financial Advisor.
4. You cut yourself some SLACK
So you have committed many money mistakes in the past, acknowledge the mistakes, take the lessons, forgive yourself and move on.
There is not use crying over spilled milk. It will only weigh you down.
In fact, forgiving yourself is one way of focusing on the future.
5. You ask QUESTIONS
In some cultures and societies, especially in Tanzania, talking about money is considered a taboo. People look at you funny when you negotiate or ask about salaries or talk about your money troubles.
The truth is money is an uncomfortable topic for most people but it does not have to be for you. And that can start with simple questions or conversations about money.