Signs of healthy finances, let’s check your financial condition

It’s not just your body that needs to be healthy, your finances should be too. Healthy finances can affect many aspects of life, including your personal or family well-being.

Why is that? Because financial health shows that you can manage and allocate expenses wisely, set smart priorities, and even control your ego. So, what are the signs of healthy finances? How important is it to keep your finances in check?

Rather than staying curious, let’s check your current financial condition by looking at the signs of healthy finances below.

Signs of Healthy Finances

To be considered financially healthy, here are some signs to look out for:

1. Paying bills and installments on time

One of the main indicators that someone can manage their personal finances is how timely they are in paying their bills or installments. This shows they are committed to fulfilling responsibilities and avoiding late fees or extra interest charges that can grow over time.

You should practice this too. Prioritize paying your main needs like bills and installments so you don’t get overwhelmed or end up paying more than necessary.

2. Having savings and investments as future prep

No one knows exactly what the future holds, but someone with healthy finances usually already has a backup in the form of savings and investments.

You might not feel the benefits of savings and investments right away. But you’ll realize how important it is to set aside part of your income for these when you suddenly need funds for something unexpected.

In short, a good financial habit is to allocate money to savings and investments right from the start, not just use what’s left at the end of the month.

3. Daily needs are covered effectively

Another sign of financial health is being able to meet your basic needs without any problems. Especially for those with families, it’s important to prioritize daily and monthly needs over personal wants.

Everyone’s definition of essential needs can be different depending on their goals. But make sure you’re covering the basics like food and clothing to support your daily activities.

4. Smooth cash flow in and out

Every income and expense ideally should be tracked with each transaction. This data helps you review and evaluate your monthly cash flow.

You can create different categories for your spending, like essentials, bills, installments, and so on. Same goes for income sources like your salary, bonuses, holiday allowance, and more.

From there, you can evaluate your financial flow over time. Are you spending more than you’re earning this month?

Why Maintaining Financial Health Matters

Those signs of financial health exist for a reason. It’s really important to start managing your personal finances early on. Why does financial health matter? Here are a few benefits you’ll notice.

1. Reaching financial freedom

Financial freedom, or not stressing about money, is probably a dream for everyone. It means you don’t have to worry about bills or loans, you have an emergency fund, and your savings are secure.

To get there, you’ll need to adopt a mindset of sacrificing short-term wants for long-term gain. That means saying no to impulse buys and FOMO-driven spending so you can save, invest, and insure yourself properly.

But financial freedom doesn’t mean you’ll have no bills or needs at all. You can still meet your basic needs using the tools offered by banks or credit cards.

Just like what Honest Credit Card offers. This card is fully accessible through the Honest App, from registration to managing your transactions.

Inside the Honest App, you’ll find budgeting tools as a credit card feature that help you manage your expenses. With flexible payment features, you can set your monthly payments to match your capacity. Pretty cool, right?

2. Preventing expenses from exceeding income

Another reason to maintain financial health is to avoid the “more spending than earning” trap. Once you’re used to managing your personal finances, you’ll find it easier to hold yourself back.

This means not blindly following trends or making impulse purchases on things you don’t really need.

3. Avoiding stress from piling debt

The saying “trying to gain but end up losing” won’t apply to you if you have healthy finances. That’s because you won’t have to worry about mounting debt as long as you manage your money properly.

You’ll naturally separate part of your budget to prioritize loan or installment payments. That way, you can avoid interest or late penalties that only add more stress in the long run.

So, those are the signs of healthy finances to look out for. Go ahead and check if your current financial state fits the category of financial health. If it doesn’t yet, no worries. It’s never too late to start.