Experts at Accredited Debt Relief say if you want to understand your financial health, start by asking yourself these questions.
1. Can I Afford an Emergency?
No one ever plans to crash their car, lose their job or drop everything to care for a loved one. But people with healthy finances have a plan for when catastrophe strikes: an emergency fund.
If you think an emergency could put you into immediate financial hardship, you might want to step back and assess your spending.
Financial health experts often say that building an emergency fund should be the highest priority, even before other savings.
2. Am I Making Progress Towards My Financial Goals?
It doesn't matter if you earn $10,000 or $1 million per year, you probably have aspirations to travel, buy a home or save for retirement.
One reliable indicator of your personal financial wellness is your progress towards those financial goals.
If you're putting money into savings — no matter how small the amount — it's a sign that you're able to provide for yourself beyond your immediate needs.
3. Do I Have a Choice in How I Manage My Money?
Sometimes, we believe that we have more choices for how we conduct our lives than we actually do.
This is especially true when it comes to our financial options. From the cost of living to the type of bank in your neighborhood, external factors impact your options for money management.
Taking your personal circumstances into account, consider your options for things like loans, credit cards and other banking services.
If your budget, debt or credit score impacts your ability to access these opportunities, then your financial health may be more compromised than at first glance.
Financially healthy people are able to choose the institutions, credit cards, loans and programs they want to work with, while those lacking options can get stuck with expensive or subpar services.
But the good news is that healthy habits can help you maintain stability — and improve the options available to you.
4. Do I Feel in Control of My Finances?
Especially for those digging their way out of debt, a sense of control can feel unattainable. The inability to save, afford monthly payments or qualify for loans can undercut your motivation, too.
Feeling out of control may also be a clue that your spending habits, relationships and career need attention — and, potentially, change.
But if you feel pressured, trapped or resigned to your financial situation, there's hope for you. By simply completing this assessment, you've begun to rethink your finances.