11/08/2021
We all know what physical health is but have you thought about your financial health? In simple terms, it’s the state and stability of an individual’s personal finances and financial affairs.
You’re probably thinking, “I’m earning a steady income, paying my debts, and setting aside some savings in my bank account.” But, to avoid unexpected surprises in the future, it pays to be sure that you’re in the pink of health, financially.
So, rather than second-guessing, why not get a financial check-up? Just like how important it is to go for a medical check-up every year, the same can be done to ensure our finances are healthy. The lack of financial knowledge and planning can be a contributing factor to an uncertain future so it’s important that we start as early as possible.
Strong financial health is, needless to say, vital in supporting many of our important life goals including a worry-free retirement. Here are 2 indicators that suggest your financial health is in good shape!
1st Indicator - Is there such thing as Good Debt?
You may be asking, “Is there such a thing called good debt?” Well, yes! The word debt has such a negative connotation to it most of us run away from it as soon as we hear it. But, if you think about it, most of us have debts to pay anyway. Some debts can even help you increase your net worth or quality of life in a meaningful way – which makes this kind of debt good.
For example, debts incurred for things like getting an education, setting up a business, and buying a residential property are justifiable as long as you’re able to manage the repayments.
Take buying a property, for example. You can flip the property for gains or rent it out to generate passive income to increase your net worth. Additionally, good debts also help pull up your credit score and open opportunities for higher credit lines as it indicates to banks and lenders that you are a responsible
2nd Indicator
Oftentimes, it’s easy to put off planning for retirement until the last minute as there are other immediate needs that we usually dedicate our savings to — and many of us would count on our EPF savings to be there for us when we retire. Two out of three EPF members aged 54 have less than RM50,000 in retirement savings, while 50% of members above the age of 55 exhaust their savings in five years.
Yet, our life expectancy at birth has increased to 74.9 years in 2020. As we’re on our way to become an aged nation, we need to be active in planning for our retirement so we will have enough funds to live out our golden years without financial worries.
If you’ve already started stashing away savings in more than just your EPF accounts or have charted out your retirement game plan, then you’re a step closer towards achieving good financial health. Take up a Private Retirement plan from insurance company as they are reliable and secured fund protection under the Insurance Act 1996 which is creditors proof. Their funds perform up to 33% depend on which fund you select.
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