Financial health
Hello, the development of today's topic arose in a conversation with a Dr. From the Dominican Republic (a specialist with more than 30 years of experience in his field), businessman and owner of a clinic in his country.
He told me his testimony and between the words I quote: "Before starting and being successful, I suffered from cancer in my pocket with metastasis in my wallet" it made me laugh because I know he was speaking metaphorically, but at the same time I reflected and said to myself myself: if there is financial health there is also the pathological state of it. So I decided to research more on the subject and reading I got the definition being a key element in the development of entrepreneurs. Having financial health means managing money so that income covers expenses and investments, having the ability to deal with possible unforeseen events and using it in future stages of life.
The center for finance services innovation (CFSI) has identified in a study published in the center for financial education and capabilities of a banking corporation, eight indicators that measure the state of people's financial health, "where they cite the following"
Spending less than what you earn, this indicates the ability of the individual to manage their income.
pay bills on time in full
There are two types of invoices, the high priority, that is, those that do not have a flexible payment period such as home mortgages and the low priority are more flexible. Both must have the same importance and diligence when it comes to being canceled.Have enough savings in liquid financial products, get enough capital to live for 6 months or more without income, this is a sign of good financial health.
have enough savings or long-term assets, for example to buy a house or for children's studies.
have a sustainable level of debt, the person who knows how to manage their debts has a calmer financial life since they are not affected by late payments.
Managing a healthy credit history helps you maintain good financial health.
Have appropriate insurance, since when these are of poor quality, they give the user a false sense of protection, so before purchasing insurance, the number of family members and the level of coverage that are provided must be taken into account. offers.
Spending plan for the future. Planning finances in the short, medium and long term is very important. Thus closing with what is cited by this study.
A good diagnosis of the state of financial health is made by being clear about the types of debt, which I classify into
Good: they include loans to invest in a business or to acquire an asset, these debts multiply your money.
Bad: they include loans to acquire a liability such as buying an expensive car for your personal use, these debts make your money disappear.
Regarding credit cards, they have the following advantages; obtain credits at the moment and also the possibility of choosing the payment installments, and among their disadvantages; There is a longer payment term plus interest, its use without responsibility causes unpayable debts and in some cases compulsive addiction to shopping, this is a psychological disorder that comes from the compulsive English buying disorder (CBD) Also known as ONIOMANIA OR SHOPPINGMANIA (Here the treatment is medical, we'll talk about it)
You wonder what are the most common mistakes in personal finance?
The misuse of credit cards
Not having funds for emergencies
Not keeping track of daily expenses
Invest in unnecessary things
Go out to all the parties and spend the money
Having addictions such as gambling, alcoholism, smoking among others).
What should I do? After diagnosing a disease state such as "end-stage pocket cancer with wallet metastasis"
activate a culture of savings by always paying 10% of your income to you first, another 10% destined to create a fund for emergencies and so you can continue organizing and accounting your daily, weekly, monthly and yearly income.
Eliminate debt
Invest in assets
Study new sources of income (eggs are not put in one basket, my wise and loving father always says)
Evaluate your goals.
Finally and to reflect, I quote a writing that I read somewhere
"if you make $ 15 per hour
-that new watch doesn't cost $ 200, it costs 13 hours of your life
-That new bag costs $ 150, it costs 10 hours of your life.
- That new car costs $ 400 a month, that's 27 hours of your life a month. Budget your life, not just your money.
I encourage you to understand that it is never too late, as failure is a great opportunity to start smarter.
And of all the capacities that you possess, determination and a positive attitude towards life are one of the main ones for a radical and effective change for the better.
I say goodbye until the next opportunity hoping that this humble appreciation from the medical point of view will be of help to you, and if any reader is an expert in the financial field, they can correct me or contribute their knowledge, since for me it would be an honor, since we can provide feedback and exchange knowledge.
So I wait for your comment