The 8 Indicators of Financial Health
Ignite Better & Brighter FinHealth
Check out your Financial Health Score!
Financial health can be measured as a composite score of a person’s financial life, whether you are spending, saving, borrowing, and planning to achieve financial health. The assessment will give you an overall health score as well as advice on what you could tackle to take your financial health to the next level.
Money worries are the greatest source of stress for Canadians
More than work, personal health and even relationships.
of working Canadians feel overwhelmed by their level of debt
say they’ve lost sleep because of financial worries
spend all of their net pay or even more
say it would be difficult to meet their financial obligations if their pay was late
say they will have to delay retirement because they will not have enough money saved
Financial Stress affects your mental and physical well-being
Canadians dealing with financial stress are:
- twice as likely to report poor overall health
- 4 times as likely to suffer from sleep problems, headaches and other illnesses
We've made it our mission to eradicate those numbers
one member at a time.
The four components and eight indicators of financial health
Research has shown that these specific health indicators highly correlate with our level of financial health. The eight indicators can be divided into 4 categories: how we spend, save, borrow and plan.
Sounds easy, right? For most of us, it isn't always that easy though. And less so to do consistently. But don't worry, we're here to help.
To reach your goals, you're going to need a plan for how you will spend your money: a budget. A budget isn't about spending as little as you can - it's about taking an intentional approach to your finances. Sure, you may find that budgeting often leads to cutting unnecessary expenses, but a budget also helps you determine which discretionary expenses are worth keeping - and also leaves room for fun.
The basics of budgeting include:
- Calculate income
- Identify expenses
- Categorize expenses
- Compare your income to your expenses
- Cut unnecessary expenses
- Plan for contingencies
A budget is one of the best money management tools at our disposal. It's a simple concept yet so powerful - and often under-utilized. A budget isn't about restricting what you can spend. It gives you permission to spend without guilt or regret. When you set a budget, you are taking control of your life and entire future.
- Understand your relationship with money. Take the Your Money Personality quiz. This tool will help you better understand the “why” behind your financial decision making, while recommending positive changes tailored to you.
- Learn how to budget. Check out this 15-minute course on Creating a budget (and sticking to it) in Enrich, our free interactive digital financial health tool.
- Create your very own budget and take control of your finances. If you prefer Excel, here is a personal budget planner for you to download and try.
- Put your bills and payments on autopilot. Set up pre-authorized payments for your bills so nothing gets missed.
- Get help with your budget. We are happy to take a closer look at your finances and share our learning.
Or simply give us a call at 306.842.6641 and we'll help you get started. Or book a meeting online.
Having sufficient liquid savings (like cash or your spending or savings accounts) is important for your financial resiliency - or your ability to withstand and rebound from a financial hardship - like an unexpected car repair or job loss. You don't worry about a financial shock turning into a longer-lasting setback because you are prepared. This fund allows you to sustain your household in a time of crisis while expenses continue to pile up. You can think of liquid savings as your emergency fund or financial safety net.
How much you should have in your emergency fund?
It's hard to predict how much an emergency will cost. However, as a rule of thumb, many financial advisors recommend that you have at least three to six months of expenses in an emergency fund - that's a great goal for most members to start with. If that seems daunting, begin with a series of smaller goals to get you where you want to be.
Want to learn more?
Try this awesome (and free) Enrich course: Setting up an emergency fund. This course explores how contributing to an emergency fund can set you up for financial success. On Enrich, you can learn about emergency funds and find all of the things you need to get started on your financial wellness journey.
Regardless of the amount you choose, the single best thing you can do is get started!
It's as easy as:
- Set your savings goal. Check out Enrich's Emergency Fund calculator for a starting point.
- Open a savings account. You can open a high-interest savings account on-line or through our app.
- Put your savings on autopilot. Set up a recurring payment from your spending account into your savings account account each pay day. You'd be surprised how fast even $10 or $20 per week adds up.
Remember, it’s ok if you have to use the funds for emergencies before you reach your first goal. An emergency fund is meant to be tapped and replenished.
Having sufficient long-term savings is integral to your financial health as well. Having sufficient long-term savings is necessary to achieve financial security and take advantage of opportunities such as investing in a home or a child’s education. Having a higher sense of financial well-being means you are on track to meet your financial goals. You are setting goals that are important to you, and working toward those goals. You enjoy a feeling of security when you save for the long term. Because you won't require access to these funds, you can invest these funds to maximize returns and reach your goals quicker.
- Learn about Saving for goals. On Enrich, you can learn about Saving for goals, investing, goals and so much more.
- Setting financial goals can help you plan for the future. If you like to read, check out this article: Define your long-term goals. If you'd rather watch, here's a helpful, 3-minute video to get you started: How to Define and Prioritize Your Goals.
- Add action to your goal. A gap analysis is a great place to start. Look at your current situation alongside your goal. Understanding the difference between where you are now and where you'd like to be will help you determine what how much you need to save to reach your goal. We'd love to help, in fact, it's our area of expertise!
- Build an investment strategy. We can help you build an investment strategy tailored to your personal objectives, time frame and risk tolerance.
- Put your savings on autopilot. Start your investment strategy with an automatic contribution. We offer many ways to invest; from in-person to robo-advice and everything in between, we have you covered.
Your level of debt has a significant impact on your financial health. Those with higher levels of financial well-being feel comfortable with a manageable level of debt. However, at some point in time, most of us have had more debt than we are comfortable with, or maybe even lost sleep over.
- Understand financial stress better. Check Your Financial Stress Score in one minute or less. Plus, get tailored recommendations to help you lower stress, and track changes.
- Understand your debt level. Use the Debt-to-Income Ratio tool to help you understand if your debt level is healthy or needs work.
- Tackle your debt. Check out the Step-by-Step: Your Get Out of Debt Checklist if you're ready to get serious about tackling debt.
- Choose a debt reduction strategy. Should you pay off the loan with the lowest balance or the loan with the highest interest rate first? Find out now.
- Revisit (or set) your budget to reduce your debt load. A budget can make it easier to regain control of your finances and decrease your debt. Learn more.
- Consolidate your debt to lower your payments - even though your balance doesn't change when you consolidate loans, your payment is often much lower. Firstly, because the rate is typically lower. Secondly, you can choose a term that make your payments more manageable. Learn more.
Or talk with us. Your financial well-being is our priority, and we have local experts with compassion and advice to walk you through a debt reduction plan.
Your credit score is an indicator of your credit health. It contains detailed information about your previous financial decisions and influences the terms and rates of your future credit options. Understanding your credit profile can give you more power in the borrowing process.
- Access your credit history and score. Through our partnership with TransUnion, we're excited to offer CreditView. With this interactive dashboard, you'll gain access to all of your credit information at a glance including your history and score. Since your credit score influences your future credit options, it is important to ensure everything is accurate and to report any discrepancies. It's a free service we offer our members! It's just our little way of saying thanks for being a member. Learn more.
- Build a better and brighter credit score. CreditView has the tools, resources and advice to help you understand and improve your credit rating. There is even a simulator to determine how potential credit decisions may impact your score. Put simply, CreditView is a simple and powerful dashboard designed to help you harness the power of your credit score. Alternatively, you can check out this great article on Building a good credit score.
- Start a conversation with us. We are happy to offer personalized advice and solutions on how you can build a better and brighter credit score.
Your emergency fund, or liquid savings, should insulate you from relatively smaller hardships. Insurance is for the extreme, where there are remote-risk/high-peril events, like being diagnosed with critical illness or incurring disability. For example, an emergency fund should tide you over for a few months while you are between job opportunities; insurance could cover lost income due to disability for years. Appropriate insurance levels allow your to be resilient in the face of extreme hardship.
Some people think of life insurance as something they’ll need to start thinking about as they approach retirement. The truth is – if someone you love will suffer financially if you become critically ill, disabled or pass away, you need insurance to be included as part of your overall wealth preservation strategy.
- Check out this article on Assessing your Personal Insurance Needs. It has some great questions to ask yourself to determine what level of insurance you'd be comfortable with.
- Walk through a needs assessment. Determining how much life insurance coverage you’ll need is an important step towards a balanced wealth plan. An insurance advisor can work with you to calculate how much you need now and anticipate your needs well into the future.
- Come see us. We can help you put the coverage you need in place to protect you, your assets and your loved ones.
Dream, plan, do.
Need we say more? Planning is really determining what action steps you need to take to make your dreams come true. We'll take a look at where you are and where you'd like to be. Then we build a plan tailored to you and your goals.
Planning ahead means you are proactive; you are thinking about the future and interested in improving your financial health. The ability to plan ahead correlates highly with financial health.
- Learn about financial planning. To get started, here's an awesome (and free) course: Creating a financial plan for your priorities and goals. On Enrich, an award-winning financial education platform, you can learn about financial planning and so much more.
- Find out if you're on or off track for retirement. Try out the Retirement Analyzer to see how your retirement plans are shaping up.
- Create (or update) your will. Whether you are writing it yourself, or enlisting the help of a lawyer, here's a helpful article with a few things for you to consider and help you get started.
- Create a Financial Plan. Our local team are certified experts in their field, with years of experience helping individuals and businesses create practical financial plans that secure their future.
Ready to level up?
Check out Enrich!
Continue your financial health journey with Enrich, a free interactive digital financial health tool.
- Enjoy unlimited access to education on spending, saving, borrowing and investing
- Get personalized content, mini-courses and tools just for you
- Your Money Personality is always a favorite!
- Reduce financial stress and build a strong foundation for your financial future
- No selling - don't worry about annoying ads popping up, or a sales job disguised as a course, this tool is designed solely for the purpose of learning.
- No judgement - ever. In fact, we can't even see the information you enter into the tools or resources. Your financial wellness journey is personal and we keep it that way.
- No data-sharing - your data is safe and secure inside the Enrich platform and we will never share it with anyone.
- No fees - this is a service provided to our members completely free-of-charge. When we say we're serious about your financial wellbeing, we mean it!