Today, June 27th, is #FinHealthMatters Day. Created by the Center for Financial Services Innovation (CFSI) in 2016, Financial Health Matters Day reminds us how important financial security is to our way of life. While obviously not as well-known as other holidays, today is arguably every bit as important.
In fact, Financial Health Matters Day needs to be on everyone’s radar because the gloomy economic facts are staggering!
- 29% of Americans have NO emergency savings and 21% can’t cover 3 months of expenses
- 57% of American adults (about 138 million people) are struggling financially
- Nearly 800,000 bankruptcies were filed in 2016
- 61% of aged beneficiaries received AT LEAST half of their total income from Social Security in 2014
Unfortunately, those are just a few of the many stats describing the weakened financial state of American adults. And the bad news doesn’t stop there.
In a crazy world of easy credit and glamorized overspending, “Financial Health Matters Day” becomes not only important, but critical to our national perspective about money.
In all honesty, we recognize plenty of seemingly irrelevant calendar events. The month of June alone signifies several things, including National Accordion Awareness Month, Adopt a Cat Month, and Fight The Filthy Fly Month (my personal favorite)! Within the month, we have National Sun Glasses Day, Donald Duck Day, and I’m really looking forward to National Hug Holiday on Thursday!
While I’m certain those are all worthy of acknowledgment, my passion is financial education. So today, I’m going to pick up the torch for financial health, because it matters!
What Is Financial Health?
I’ve been a financial planner for more than two decades. This has allowed me the privilege of working with clients across the country on a variety of financial issues. Over the years I’ve learned financial health isn’t all that easy to describe. It tends to be highly unique to each person’s own situation.
At the most fundamental level, financial health is the ability to not only maintain, but improve your standard of living over time. That’s what our parents wanted for each of us, right? To have a better life than they did?
Not only is it about maintaining and improving your standard of living, it’s also about the peace of mind and serenity that process provides us. No one wants to stress out the last day of the month because our bills will be auto-drafted the next day, leaving us wondering if there’s truly enough money to cover them. True financial health means never having to be put in that situation to begin with!
Financial health also means preparing in advance for big, unexpected expenses. For example, when your air conditioner drops dead and needs replacing, or your car dies on the side of the freeway, these are big (and random) expenses! If you’re financially healthy, you navigate those challenging financial events in stride. More importantly, you’ll do so with the peace and serenity I mentioned above.
Finally, financial health requires investment in our future. Wisely using your 401(k), IRA’s, Roth’s, Health Savings Accounts, and other savings vehicles to improve our “future selves” can provide us the most valuable financial health benefits of all!
Are You Financially Healthy?
It’s a simple question with perhaps an incredibly difficult answer. There’s no right or wrong response, but it’s certainly worthwhile to consider your own “financial health”.
I looked up the word healthy at thesaurus.com. The synonyms which stand out to me are hearty, lively, robust, tough, and strong. Perhaps when pondering your own financial health, you can consider those words in the context of your personal finances.
Do you feel financially “hearty” when the air conditioner breaks in the middle of the summer? What about financially “strong” when comparing your retirement savings versus your retirement goals. Would you describe yourself as financially “robust” when managing and improving your day-to-day standard of living?
Again, there’s no right or wrong answer, only shades of what matters to you (and your personal financial life) the most. On this second annual #FinHealthMatters Day, I strongly encourage you to analyze your financial health. Where are you now? Where do you want to be? How are you going to get there?
Finally, you must be prepared to TAKE ACTION and work to improve your financial health! Remember, financial goals without a plan are merely financial “wishes”.