Financial Health

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DEFINITION of 'Financial Health'

A term used to describe the state of one's personal financial situation. There are many dimensions to financial health, including the amount of savings you have, how much you are setting away for retirement and how much of your income you are spending on fixed or non-discretionary expenses.

INVESTOPEDIA EXPLAINS 'Financial Health'

Financial experts have devised rough guidelines for each indicator of financial health, but each person's situation is different. For this reason, it is worthwhile to spend time developing your own financial plan to ensure that you are on track to reach your goals, and that you are not putting yourself at undue financial risk if the unexpected occurs.

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  3. How does a bank determine what my discretionary income is when making a loan decision?

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  5. How do I know how much of my income should be discretionary?

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  6. Why do economists think it is important to track discretionary income?

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