FinCon and Center for Financial Services Innovation partnered up for a contest to have bloggers explain what financial health means to them. Here’s my take on the subject.
Most people think of financial health as a state of being. To me, it’s about a conscious journey toward stability.
When I got engaged to Tim in 2006 — me on disability, him struggling to work around severe health problems — I put us on a laser-focused repayment plan for his $20,000 in defaulted student loans.
Isn’t that financially healthy?
Our income was less than $40,000 a year and we faced a constant onslaught of medical expenses. But what could we do? We lived on as little as possible and threw every spare cent at debt.
Isn’t that financially healthy?
Sometimes the debt would increase as new medical expenses hit, like when Tim needed a $12,000 medical procedure. We were often exhausted and frustrated, but we didn’t let ourselves become disheartened. Instead, we just kept plugging away.
Isn’t that financially healthy?
A two-year engagement allowed us to get the best deals for an affordable wedding. Among our hacks were a free venue, food paid for with rewards program gift cards, music on an MP3 player, a relative as an officiant, and reselling the tablecloths, utensils and dishes at cost.
Isn’t that financially healthy?
Tim got laid off at the start of the recession. I gained a small side gig, bumping our income up to $3,100 a month. Unfortunately, $700 went to rent, $500 to insurance, and $200 (or more) to medical co-pays.
Still, we made the best of the situation. We’d keep the bare minimum out of Tim’s weekly unemployment check. The rest (and anything left over from the previous week) went to debt. This meant progress four times a month instead of two.
Isn’t that financially healthy?
When we moved to Phoenix for health reasons, I bargain-shopped every moving option. Ultimately, we took only what we could fit in a 6′ by 7′ by 8′ container.
We sold or donated the rest, then began the 1,400-mile trip from Seattle. We used fliers at rest stops to find hotel deals, paying $40-60 a night.
Isn’t that financially healthy?
Once I finally found a job I could do from home, we paid off the last $7,000 of debt in five months.
Isn’t that financially healthy?
Okay, our net worth those first five years didn’t match most people’s image of financial health. But our attitudes and our actions were always focused on financial stability. Meanwhile, we’ve bounced back — and bounced back stronger — from each money obstacle we’ve hit.
Not to mention that since 2011 we’ve bought a house, paid for more than $15,000 in repairs and replacements, and had to replace our car twice (paying for the last one in cash). Yet we still managed to save $27,000 for Tim’s dental implants.
Isn’t that financial health?
When the last dental bill comes due in September, our savings account will be drained. But finally free of that looming expense, we’ll consider ourselves financially healthier than ever.
Besides, our good money habits — careful budgeting, tracking expenses and prioritizing savings — will let us build our finances back up and weather any future nasty surprises.
Those habits are the key to financial health. They’re ones that should never stop, no matter how high your net worth.
So no, financial health isn’t a state of being. It’s a state of mind. It’s a work in progress. Above all, it’s a journey — one that, if you’re reading this post, we’re on together.
What’s your definition of financial health? Do you think you’re making headway?
My definition of financial health is feeling like I have all my ducks in a row. I am financially conservative, so I like knowing I am saving and investing appropriately. I never want to stress out over money – over all, that is my main goal.
Holly@ClubThrifty recently posted…99 Ways to Make Extra Money
It seems like you guys are well on your way to that point — and still managing to gavel the world. All I all, pretty awesome!
My definition of financial health is having a plan for your money. Having a plan and following it helps reduces stress and allows you to focus on other things in your life.
Brian @ Debt Discipline recently posted…What Financial Health Means to Me
Plans are good, definitely integral to financial health. Just as long as you’re ready for them to sometimes go to hell.
I always include worst case in my plans, and my emergency fund is a pretty good buffer too.
Brian @DebtDiscipline recently posted…What Financial Health Means to Me
This is a great post! I agree about financial health being a state of mind and these are important habits that take time to “take hold”. It is just like any other good habit! I think those with high net worths (well, those that have high net worths for long periods of time) – follow those keys to financial health as well. Those who are short-time high net-worthers (if that makes sense) probably don’t have those habits well-ingrained.
Vicki@Make Smarter Decisions recently posted…What is the cost of not learning? Or not learning how to make better decisions?
Good pint. Plenty of people can’t maintain high net worth so. Look at all the lottery winners who go broke! It’s key to know how to use whatever money you have to build a stable future.
My definition of financial health is not living paycheck to paycheck.
I have always paid my bills when they come in not when they are due. It makes it easy to never be late 🙂 Also buy food when on sale and plan meals around what I have instead of making the decision that night. It allows for the cupboards to be full all while $ on the food budget.
Totally agree it is a state of mind!
That definitely sounds healthy. Admittedly, I rarely pay bills right away. Probably a bad habit but there are just always too many things going on at any given time.
It’s like our physical health – we always have to work to maintain it. But the good thing about the money stuff is that we can get a second and a third chance which isn’t often the case for some of us.
We’re doing extraordinarily well financially compared to how it was when I first started down this road, but there’s still a lot more work to be done.
Probably true of most sick people. I’m glad you’ve seen improvement, though you deserve it given how well you stretch your bucks.
Great post – You are on the right track -working to get that debt paid off. I’m glad you never gave up on it when it might have seemed overwhelming
We have had many ups and downs in our financial health when we were young. It pays to stay focused.
Yeah, we remain on the right track. One day the track may even stop going round in circles!
“Financial health isn’t a state of being. It’s a state of mind. It’s a work in progress.”
I love this so much. My financial life has basically been in a work in progress the last couple years.
As a result I think my new benchmark is ‘can I sleep at night?’ And as of recently, yes, money worries no longer keep me up at night.
NZ Muse recently posted…Why you won’t find jam in my house
So glad you can sleep now! And yes, a partner without income or very little of it definitely makes things more tumultuous. I’m just glad that you seem a bit more tranquil in your posts lately. As long as no one feeds you jam.
*round of applause*
Life is in the doing and your financial health is in the making. What a refreshing perspective!
Thanks! We’re just excited to start lives without the huge dental implant expense looming over us. Then we can focus on more positive goals.
Great perspective. I agree that financial health is a constant journey. You can always be “more” financially healthy. I think of it as a continuum where you can become healthier or less healthy. There is some gray area in there, too, where it’s not certain whether you are getting healthier or not (student loans – no job guaranteed, but much better likelihood with the degree).
DC @ Young Adult Money recently posted…40+ Ways to Improve Your Finances This Month
Yep, even rich people have backtracking at times — like when the stock market dips (cough cough BREXIT).
I like your definition, Abigail. I’m going to go against the grain here and refrain from defining financial health. I think that whatever financial decisions bring an individual to a place of peace are a big part of the puzzle, however.
FinanceSuperhero recently posted…Term Life Insurance Vs. Whole Life Insurance
Well, in a way that IS a definition — perhaps the one that applies to everyone. To you, financial health is about finding a place of peace. I like it!
Debt being paid or paid off, a little in the bank a little in the pocket and some to have fun with…..
Seems like a good bar to set!
What you and your husband accomplished is really amazing! Honestly, my financial picture feels like a disaster right now. Your post really inspired me.
We all get to the “IT’S ALL GOING WRONG! WE’RE DOOMED!” phases. It’s gritting your teeth and remembering “This too shall pass” — and maybe try not to hide under the covers. Or at least for long.
I’m with you. It’s where you are headed and how your actions are impacting your bottom line.
ZJ Thorne recently posted…What Financial Health Means to Me – Fincon 2016
Exactly! Intention really is key. There are a few very lucky folks who, well, luck into financial health. But most of us have to work at it.
Really inspiring post, Abigail. It’s not where you are, it’s not what you have (other than determination and a willingness to work toward your goals.) It’s how you are getting there, because that’s the part that doesn’t stop.
Emily @ JohnJaneDoe recently posted…Credit Card Mistakes I’ve Made (And How You Can Avoid Them)
Exactly! I doubt we’ll ever get to a place where I feel completely safe. But maybe that’s a good thing in that I’ll never get too complacent.
I like the way you described your situation and past financial wins. Good job tackling all those obstacles. For me financial Health is being able to live life with no excuses regarding living within means, funding financial goals and doing it without adding any debt.
EL @ Moneywatch101 recently posted…What is Your Personal Savings Rate?
That sounds like a good version of financial health to me (as long as “no excuses” doesn’t apply to medical expenses and/or limited earning due to disability).
Very inspiring, Abigail. I can relate to that looming debt. It’s very oppressive. I think you’ll feel amazingly free when you get past that last dental payment. To me financial health means having no anxiety about money, A large emergency fund helps us with that. We don’t panic when an important but unplanned expense arises.
Mrs Groovy recently posted…Geoarbitrage and Financial Independence
Well, I’ll probably always have SOME anxiety about money. Especially while Tim’s disability benefits (and therefore crucial Medicare coverage) is up in the air. But it’d be lovely to have enough padding to be less anxious about what-ifs and more about “How can we put more money into retirement?”
I think it’s super impressive how many great decisions you guys have made even in the face of financial and health hardships, and how positive your outlook is about all of it! There’s some serious financial health in your attitude alone! Totally agree that the journey and the direction you’re heading are what matter most. 🙂
Our Next Life recently posted…Our Biggest Lesson from the Financial Crisis // Don’t Bank on Going Back to Work
Thanks! It’s been an interesting/harrowing ride, but at least things should settle down… for a bit, anyway. No telling what the future holds.
Your journey is so inspiring – congrats on all of it. You’re right, it’s not arriving that makes you financially healthy, it’s that constant forward progress.
Stefanie O’Connell recently posted…Why Single Ladies Can’t Afford a Single Income
You of all people would definitely know that. You managed to be financially stable even when your income itself wasn’t stable!