What Financial Health Means to Me
Being an adult is overrated. We have to worry about being physically healthy, mentally healthy, spiritually healthy, and the one that everyone seems to forget about: financially healthy.
So what does it really mean to be financially healthy? To everyone, the definition may be totally different, but for me when I think about being financially healthy I think about being financially sound, being aware of my finances, knowing where my money is going every month, having a clear understanding of my debt, my income, my investments and overall being extremely aware of my complete financial status and what I want my financial future to look like.
According to the Center for Financial Services Innovation’s Consumer Financial Health Study, 138 million adults are struggling financially, this once included me! Even as a financial expert my finances have not always been healthy. When I first started my business, I exhausted my personal finances and even began to ignore them. I was so fixated on growing my business and helping everyone else with their finances, my own finances fell ill. My credit card debt shot up, I got behind on payments, I even almost lost my home.
Just like if you ignore a health issue, it will not go away; if you ignore your financial health, it will only get sicker. In order to turn this around, I needed to have a financial check-up. I sat down with my family and explained to them what was going on, and just like I helped my clients, they helped me. Here is what I did:
Accept that you messed up
This was huge for me. After always being financially on my game, buying my first house at 22, having a perfect credit score and being an extreme saver, I had to accept the fact that I allowed my finances to become ill. Once I accepted that fact that I messed up and forgave myself, I identified where I went wrong and begin strategizing on how to fix it.
Get real about your current financial situation
Most people become financially ill because they completely ignore their finances and have no idea what financial shape they are truly in. During this financial check-up, you need to pull together everything with your name and a dollar sign and begin reviewing how much money you are making, all of your expenses and all of your debts. This will finally give you a complete view of where your finances are.
Create a plan to improve your financial health
Now that you know exactly where you went wrong, how much income you are making, what your monthly expenses are, and how much debt you are truly in, you can begin creating a plan to turn things around. This could be looking for ways to increase your income, reducing expenses, negotiating with lenders to repay your debt, or reducing your interest rates.
It can be very daunting to acknowledge that you have allowed your finances to become ill. However, remaining aware of your financial situation will ensure that you remain financially healthy. True financial health means you are aware of your financial situation, you have a vision of where you want to be financially, and that you are using your finances to live the lifestyle that makes you the happiest you!
Check out the Center for Financial Services Innovation for more on #FinHealthMatters Day!
Dominique Broadway is an award winning Financial Planner, Personal Finance Coach, Speaker, Finance Expert, Entrepreneur and the Founder of Finances De•mys•ti•fied & The Social Money Tour. She has a strong passion for working with young professionals, entrepreneurs and people of all ages to bring their Dreams2Reality. Dominique began working at major brokerage firms such as UBS Financial Services and Edelman Financial Services, at the ripe age of 21, focusing on clients with $10 million and up in investable assets.