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.

BREAKING DOWN '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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RELATED FAQS
  1. Why would you look at a company's net debt rather than its gross debt?

    Understanding debt carried by a company is key to gaining insight into its financial health. One of the various ways an observer ... Read Full Answer >>
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    The EBITDA margin is a considered to be a good indicator of a company's financial health, because it evaluates a company's ... Read Full Answer >>
  3. How soon should I start saving for retirement?

    The best answer to the question, "How soon should I start saving for retirement?", is probably, "yesterday," and the second ... Read Full Answer >>
  4. Can I use my 401(k) as a collateral for a loan?

    Although federal Internal Revenue Service, or IRS, regulations prohibit using a 401(k) account as collateral for a loan, ... Read Full Answer >>
  5. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
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    A wide range of possible deductibles are available with health insurance plans, starting as low as a few hundred dollars ... Read Full Answer >>

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