I grew up in a family that took financial health very seriously. I had very good role models in my parents. One of two daughters, I remember feeling cared for and never worrying about money. My college was paid for and life was good. Simple principles like saving, purchasing only on sale and the joy of a good deal were instilled in me.
My adult life has been very different. Financial health has been a constant struggle for my husband and I. Why? Many reasons really, life happens and we navigate through with God’s help.
We have 6 children, we are a single-income family, and my husband has had significant health issues. A brain tumor and seizures to name just two. We have a daughter with special needs who has required many therapies that we have gladly paid for. We have adopted a child. We have had the normal things in life like job loss, poor personal choices, and the issues of the national economy. Four of my daughters as well as myself have struggled with dietary allergies, Celiac Disease, and Autoimmune Diseases. Special diets cost a lot of money. Life costs money.
The real question is what is financial health and why does it matter?
According to the Bible financial health is dependent on certain principles.
- God is the Provider (Philippians 4:19)
- Giving (Luke 6:38)
- Saving (Proverbs 21:20)
- Contentment (Hebrews 13:5)
- Working Hard (Proverbs 14:23)
- Seek Godly Counsel (Proverbs 15:22)
- Keep Financial Records (Psalm 23:23)
- Tithe (Leviticus 27:30)
- Live Debt Free (Proverbs 22:7)
- Love God not Money (1 Timothy 6:10)
Money management is no different than any other area of our lives. When we follow God’s plan and walk in obedience then we have blessings when we don’t we have issues. Financial health is not just about obedience though, there are many other contributing factors to maintaining your financial health. The point I want to make is that as Christians we have a responsibility to walk in obedience. You do your part and walk in obedience and God will do His part and allow circ*mstances that will grow you into a godly individual.
Finances have a way
of bringing out the true
condition of our hearts.
Finances can bring out the worst in me. I am ashamed to say that if I lose perspective in the area of personal finances I can easily become an emotional wrecking ball. For me, it comes down to a trust issue. Do I trust that God is better able to manage my finances than I am? Do I trust that He knows my circ*mstances and is working all things together for my good? When we trust God in all circ*mstances the peace that passes all understanding descends upon us so that our financial situation does not define who we are or take away our peace. When we have confidence that God will care for us, that knowledge and obedience give us good financial health.
When I am in a state of financial unrest I have found 3 things that help return my peace.
- Prayer
- Read my Bible
- Do Something (For example, it could be anything from clipping a coupon, looking through sale flyers, or reading a Dave Ramsey post.)
Why do healthy finances matter? They affect so many areas of our lives. Our marriage, our relationship with God, and our stress levels. Unhealthy financial practices can make us sick. If you have not already taken Dave Ramsey’s Financial Peace University then I highly recommend investing yourtime in this Biblical approach to finances. It will give you the tools you need to become financially healthy!
7 Baby Steps To Financial Peace from Dave Ramsey
- $1,000 to Start an Emergency Fund An emergency fund is for those unexpected events in life you can’t plan for. Whether there’s a plumbing issue and everything but the kitchen sink is draining, or your brakes are squealing at every stop sign, you can beready!
- Pay Off All Debt but the House List all debts but the house in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest-rate debt first.
- 3 to 6 Months of Expenses in Savings This step is about building a full emergency fund. It’s time to kick debt for good, with 3–6 months’ worth of emergency savings. Sit down and calculate how much you need to live on for 3–6 months (for most that’s between $10,000–15,000) and start saving to protect yourself against life’s bigger surprises like the loss of a job. You’ll never be in debt again—no matter what comes your way.
- Invest 15% of Household Income Into Retirement Now it’s time to get serious about retirement. With no payments and a full emergency fund, put 15% toward the retirement of your dreams. Between your 401(k), Roth IRA, and Traditional IRA, you have a lot of options. Find the fit that is right for you. The money you were using to attack debt can now help build your future.
- College Funding for Children College tuition and housing expenses continue to rise. Don’t let college sneak up on you. Saving now will put you ahead of the game when your kids graduate from high school. Two smart ways to save for your kids’ college are a 529 college savings fund or an ESA (education savings account). These are both tax-advantaged savings vehicles that let you save money for your kids’ education expenses.
- Pay Off Home Early It takes the average family five to seven years to pay their home off early. Just imagine life with no mortgage. There’s only one more debt standing in the way of freedom from all debt! Apply all the extra money toward paying off your home. Not only are you paying off your home early, you’ll be saving tens of thousands of dollars in interest fees.
- Build Wealth and Give This is the last step and by far the most fun. It’s time to live and give like no one else! Build wealth, become insanely generous, and leave an inheritance for future generations. Do you know what people with no debt and no payments can do? Anything they want! Now that’s leaving a legacy.
YOUR TURN…
What do you do to maintain your financial health?
Blessings,
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FAQs
Your financial health takes into account several factors of your personal finance situation (like your net worth, credit score , debt , savings , retirement fund , etc.) to provide a holistic look at how prepared you are to meet different financial needs.
What is financial health and why is it important? ›
Financial health is a composite measurement of an individual's financial life. Unlike narrow metrics such as credit scores, financial health assesses whether people are spending, saving, borrowing, and planning in ways that will enable them to be resilient and pursue opportunities.
Why does financial wellness matter? ›
Financial wellness is important because it equips us with the knowledge and skills we need to manage money effectively. Keeping track of expenses and making a budget and sticking to it are important skills to have in order to be financially responsible and independent.
Why do you need to take responsibility for your financial health? ›
Being financially responsible in a nutshell
The core principle of financial responsibility is that you live within your means. That generally means you spend less than you earn, save for the future and emergencies, and pay your bills on time. Financial responsibility isn't always fun, but it has long-term benefits.
How do you have good financial health? ›
How good habits can help you achieve financial wellbeing
- Live within your means. ...
- Spend wisely. ...
- Free up funds. ...
- Build emergency savings. ...
- Avoid excessive borrowing and manage your existing debt. ...
- Save for the future. ...
- Protect what matters. ...
- Beware of scams and fraud.
One of the primary reasons why financial wellness is important is that it can lower stress levels. That's why so many employers are beginning to offer financial wellness programs as part of their employee benefits packages.
What causes financial insecurity? ›
The causes of financial instability
Financial instability occurs when shocks to the financial system interfere with information flows so that the financial system can no longer do its job of channeling funds to those with productive investment opportunities.
Why is it important to be financially well? ›
People who experience financial wellbeing are less stressed about money. This, in turn, has positive effects on their overall mental and physical health, and on their relationships. It's more important now than ever to help your colleagues, customers and community to build financial wellbeing.
Why is it important to be financially aware? ›
Strong financial knowledge and decision-making skills help people weigh options and make informed choices for their financial situations, such as deciding how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.
Why is it important to stay financially stable? ›
Ultimately, financial stability means you have a sense of security and an ability to manage your financial present – and future. Financial stability is important not only because it means that you have enough money to pay for the costs of life, but it also provides peace of mind by reducing stress related to money.
When you start managing your finances, you'll have a better perspective of where and how you're spending your money. This can help you keep within your budget, and even increase your savings. With good personal finance management, you'll also learn to control your money so you can achieve your financial goals.
Why should you care about your finances? ›
Financial Freedom: When you care for your finances, you are not dependent on anyone for your needs. You can plan your investments and savings according to your goals and aspirations, leading to financial freedom.
Why is being financially responsible important? ›
By sticking to a budget, prioritizing savings and maintaining an awareness of their finances, they are strong, secure and completely independent. Being financially fit means living a life without battling anxiety about getting through the month or stressing about the future.
Why is it important to understand financial health? ›
By incorporating behaviors like monitoring your financial status and creating a conscious spending plan based on your values, you can start to chip away at your stress and move toward your goals — while also increasing your mental, physical and overall well-being.
What is financial health in simple words? ›
Financial Health: One's ability to manage expenses, prepare for and recover from financial shocks, have minimal debt, and build wealth.
What not to do to stay financially healthy? ›
7 Bad Financial Habits You Need to Break Right Now
- Stop spending more than you earn. ...
- Stop ignoring your bills. ...
- Stop using your credit cards like free money. ...
- Stop thinking you're not smart enough. ...
- Stop making it hard to save. ...
- Stop complaining about your paycheck. ...
- Stop thinking more cash brings happiness.
Knowing how to look after a company's financial health is critical to the success of a business. It's a way of measuring a company's performance and determining its level of profitability.
Why is finance so important in healthcare? ›
Effective healthcare financial management is essential to balancing rising costs while delivering quality healthcare services. Healthcare financial management involves a range of processes that ensure that the organization remains solvent and can deliver patient care.
Why are healthy individual finances important? ›
When individuals manage their finances well, they have more disposable income to spend, which leads to increased consumer demand. This demand stimulates business production and can lead to job creation and a healthier overall economy.
What does it mean to be financially well? ›
More specifically, having financial well-being is when you: Have control over day-to-day, month-to-month finances. Have the capacity to absorb a financial shock. Are on track to meet your financial goals. Have the financial freedom to make the choices that allow you to enjoy life.
