Howdy, Money Buddies!
Hope Y’all are doing well, despite this “Beer” Virus thing, that has shaken up the world and our lives.
It’s 4:33 am as I peck away at this post. Another morning that Prednisone has roused me after a few hours of sleep. Well, it’s better than pain chasing me out of bed, which has been common for most of the past year.
These days, I use these solitary hours to work (quietly, less I disturb my Sweet Heart) on various projects around the place.
This morning, as I sip iced coffee and wait for my breakfast ham-stuffed bread roll to heat, I figured that it was time to exercise my fingers at the keyboard.
So, here goes. I’ve warmed up my pharmaceutically comforted digits and I’m ready to hammer away at the keys.
Having moved to Ennis, TX late last summer, I’ve grown attached to the town and have found myself drawn to the small local papers.
With that said, I’ve started picking up issues now and then and peruse them for local information. Recently, I came across an article titled, something like, “Maintaining Your Financial Health During the Pandemic.”
Of course, I was drawn to the article, and in my first quick glance I noticed that it didn’t have a By Line. Hmmmmm. No identification of the source.
Having taught Journalism in the early ’90s, I was taken aback by the lack of citation. That realization peaked my interest even more.
In short I was disappointed, as the article focused entirely on credit and credit scores. Really?
I looked over the article again, searching for some indication of the source, expecting it to be an advertising piece by somebody in the credit business. Nope, didn’t find anything in that regard. There was no indication of who the article was written by.
Interesting.
Some how, the paper has slipped into the recycle bins, so before I dump them this morning I’m going to try to locate it. I want to reference it correctly when I write to the newspaper in the article’s regard.
Credit, as many of us know, is not the sole element of “Financial Health” that should be taken care of. Nope, definitely not. It’s just one element.
Unfortunately, with COVID-19, and it’s ensuing affect on the world financially, many folks have found themselves out of work, and debt is an issue to be contended with.
So, what is Financial Health?
According to Investopedia:
Financial health is a term used to describe the state of one’s personal monetary affairs. There are many dimensions to financial health, including the amount of savings you have, how much you’re putting away for retirement, and how much of your income you are spending on fixed or non-discretionary expenses.”
Kagan, Julia. “Financial Health” Investopedia, 14 Jan. 2020, www.investopedia.com/terms/f/financial-health.asp. Accessed, 26 May, 2020
You will notice that Credit, and Credit Score, were not mentioned in the quote above. Instead, the main elements noted were, Savings, Income and Spending.
My thoughts on Financial Health.
Now, as my site disclaimer reveals, I’m NOT a Financial Professional. Nope, I’m not. I’m a former Teacher, Counselor, and Some Times Principal.
Heck, although a teacher, I was never certified in Finance. I was an Industrial Technology and Journalism instructor, who happened to take an interest in my financial well being, ultimately leading me to found Money I$ Not Taboo.
As my bio indicates, I’ve bumbled through the world of Personal Finance. In doing so, I’ve established the following elements as my focus on my Financial Well Being.
Cash Flow
Finance is based upon money, and we must have money coming in to use it as the tool that it is. We use money by spending it on goods, services, and such.
So, Cash Flow is money coming into our pockets/accounts and money going out of our pockets/accounts. Money coming in is Positive Cash Flow and money going out is Negative Cash Flow. The way I feel, one should ALWAYS strive to have more money coming in than going out.
If you’re familiar with Dave Ramsey, you might be aware of his mantra, “Cash is King.”
My take on that: “Cash is Cool, but positive cash flow is king.”
You’ll find a handful of articles on Cash Flow at MinT’s page: Cash Flow and Budgeting.
Net Worth
Net Worth is simply:
Your Assets minus Your Financial Liabilities = How Much You Have Left In Asset Worth
Your Net Worth computation can result in a positive number, a negative number, or even zero. It all depends upon how accurately you account for your assets, liabilities, and your computations.
Courtney L., co-editor of Money I$ Not Taboo, recently published “Net Worth vs Cash Flow: What’s More Important?” on her website Your Average Dough dot Com. It’s a great piece, that I recommend that you check out. She’s got more great stuff at Y.A.D.
You can find more information on Net Worth at MinT’s page: Net Worth.
Financial Health is Based Upon Cash Flow and Net Worth
As I see it, the two key elements of Personal Finance are Cash Flow and Net Worth.
Savings, Investments, Emergency Accounts, Credit, Debt, Life Insurance, and other money subjects are sub-elements in Personal Finance.
Others’ Take on Financial Health
So, I’ve shared my thoughts on Financial Health, but there’s a wealth of useful information out there. Here’s a few sources that I recommend you checking out.
- Financial Health Defined – What the heck is Financial Health anyway? And why is it important? Ask those questions in a room full of people and you will get an interesting array of answers!
- 5 Simple Steps To Evaluate Your Financial Health – Your financial health is important, just like your physical health. Doing a financial wellness check, can help you determine what adjustments you need to make in your life.
- Why Your Financial Health Matters – Like physical health, financial health is fundamentally key to leading a happy and successful life. Creating a sound financial present does more than alleviate current stress – it lays the foundation for a stable and secure financial future.
- Score Your Financial Health – Your financial well-being is about more than your income or credit score. Answer 10 simple questions about how you spend and save — and then see how to improve your financial future.
- 8 Factors That Determine Your Financial Health – Are you financially fit? Here’s how to find out, and what to do if you’re not.
Well, there you go, my thoughts on Financial Health and resources to look into, to help you get better insight into your Financial Health and how to take care of it.
So, How’s Your Financial Health?
