What does it mean to be financially healthy?

(Image: Supplied)
(Image: Supplied)

As we go about our lives, we expect our bodies to simply take us where we need to go. The assumption is that we are basically healthy, and will continue to be for the foreseeable future. But how do you know?

Much like our physical health, we expect our money and financial circumstances to take us where we need them to and provide for us without us having to think much about it. This is the mark of someone financially healthy – someone whose cashflow is enough for their needs and wants, enough for now and enough for the future. But what if you’re less healthy than you think?

You don’t know what you don’t know

There is a strong link between financial knowledge and financial health. Research shows that higher levels of financial knowledge are correlated with better financial outcomes and financial behaviours like adequate retirement planning and debt management [1].

If all you have ever seen are unhealthy behaviours, how can you possibly know you’re not healthy? Unless you’ve been educated on a topic, you don’t know what you don’t know. People who do not know their current situation cannot take measures to improve it.

Like many other countries where financial literacy is not prioritised at schools, few kids learn good money habits from their parents and many never get any formal education.

A ticking time-bomb

If your financial behaviours are unhealthy, the situation is similar to having unhealthy physical habits, like only eating junk food, not sleeping enough and not exercising – you’re going to get sick at some point.

Unhealthy finances mean a bank balance that’s unable to provide for your expenses; is floored by nasty surprises like getting retrenched or having to go to hospital; and one that has none of the safety net savings to help you when you really need them.

Again, much like physical health, the only way to know how healthy you are is to go for a check-up. Fortunately, there are now several tools to help you educate yourself if no one taught you healthy money habits before.

It’s time you got a financial health check-up

“Vitality Money takes the complex task of taking stock of your finances and translates it to a simple to understand status. The higher your Vitality Money status, the healthier your finances. We have integrated with Industry bodies to make the process as simple and intuitive as possible. Get your Vitality Money status in minutes – then use your tools to improve,” Akash Dowra, Head of Technical Marketing at Discovery Bank.

Big concepts like saving for retirement can seem daunting and far-off, and it’s hard to save for retirement when you don’t know how long you have to save. But simple financial tools like Vitality’s Retirement Assessment, which predicts your retirement age and how much you need to save to retire comfortably, can help your perspective.

You can also educate yourself online: Worth offers a six-week educational course on how to manage your money better, and Vitality Money in-app goals keep things simple, practical and rewarding, by incentivising you to achieve clear personalised targets month by month.

The prognosis is clear: get financially healthy now, to avoid more serious money illnesses later.

Visit the Discovery website for more information: https://www.discovery.co.za/bank/bank-healthier

Discovery Bank is an authorised financial services provider.

This post is sponsored, written and provided by Discovery.

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