Just like your physical wellbeing, there are plenty of telling signs when your financial health isn’t quite as it should be.
The good news is that if you can recognise the warning signs, you can get your finances back on track, financial adviser and My Millennial Money host Glen James told Your Money Live.
“You’ve first got to take an audit,” James said.
As you go through your situation, these are the five positive indicators that you’re financially healthy.
1. You can fund your back-up plan
Building a strong safety net to fall back onto in hard times should be a financial priority for anyone.
“The backup plan is the first sign you’re financially healthy,” James said.
So what should that back-up plan look like?
“You’ve got perhaps an emergency fund of cash – maybe three months of expenses – and secondly you have your insurances in place in case the worst did happen in terms of disability or permanent disability,” he explained.
2. There’s no weekly stress
Having a savings buffer means you shouldn’t be at the mercy of weekly expenses or any unexpected bills.
“You would know you’re [financially] unhealthy if a minor car crash excess of $600 really threw your whole finances out,” James explained.
3. A focus on the future
If you’ve got your present situation under control, it’s time to start looking forward.
Your finances, after all, should be working to help provide you with a better future.
“That could be a small investment each week, each month or each pay cycle into superannuation or a different investment account because we know that means you’re living on less than you earn and you’re investing for the future,” James said.
4. You’re content and willing to sacrifice
Part of that means you’re willing to trade-off instant gratification today for something better tomorrow.
That goes beyond simply saving as you start to think long-term about how you can get ahead.
“Often if you’re financially healthy, you may have had to sacrifice [in order to] be studying at night to learn more to better yourself with your career,” James said in way of example.
5. The generosity to give
Once you’re managing your own finances and are working towards the future, the final sign of financial wellbeing is having the ability to give to others.
Whether it’s supporting your favourite charity, giving to a worthy cause or helping out a friend in need, the capacity to give is a mark of true financial freedom.
How’s your financial health? Watch the full segment above for more.