What Is Financial Health? A Guide To Boosting Your Financial Fitness
Author Aventur • 19th May 22
Have you ever heard finance moguls use the term ‘financial health’ and wondered what on earth they were on about? I mean, it’s not like your debit card is heading out to the gym to get fit anytime soon, right?
Maybe not. But financial health is still an essential part of our overall wellbeing. In fact, studies show that financial health is actually directly related to your mental health. At Aventur, we’d argue that financial health should be considered equally as important as both mental and physical health.
What Is Financial Health?
Financial health is the current state of all of your finances combined. This includes credit, debt, savings, investments, assets and income. It can mean different things to different people but, crucially, healthy finances are those that are stable. However it is perceived, there are the four main components of financial health:
- Spending – the money you’re spending on a regular basis, as well as your ad-hoc spending.
- Saving – the money you have saved in savings accounts or your piggy bank.
- Borrowing – the money you’ve borrowed (e.g. through a credit card, loan or lease).
- Planning – the money you’ve planned to save, spend or borrow, and the financial goals you plan to achieve in the future.
Why Is Financial Health Important?
It is simple, really. Better financial health can and will improve your quality of life. Being financially stable means you have the ability to reach your goals – even if they are not directly related to money. If your financial health slips, you may be at risk of going into debt, losing your assets and/or not saving enough for your future. The sheer potential of these things happening leads to what we call “financial stress”, which can be extremely detrimental to both your mental and physical health.
How Can I Improve My Financial Health?
The most important thing you can do to improve your financial health is to educate yourself. A good understanding of how finances work will enable you to plan for your financial goals – things such as holidays, a new home, or your retirement. You will also have an understanding of the difference between good and bad debt, so you can avoid falling into a debt spiral. You will know when to spend, when to save and when to invest. You’ll be able to pull together a realistic budget for yourself and will be able to manage your spending, saving, borrowing and planning relatively independently.
How Can Aventur Help Me Improve My Financial Health?
At Aventur, we believe that everyone can improve their wealth and take control of their financial well-being. Our unique approach to money embraces some of the most advanced financial technology available to reduce risk and cost, and improve efficiency, whilst still providing that all-important human touch.
Our wonderful team are committed to making financial education a priority, reducing financial anxiety and helping people to feel more in control of their money.
If you’d like to talk to the Aventur team about improving your financial health, get in touch.