Gesundheit: What Financial Health Means to Me

I used to tell a running joke about my childhood: “I was so po’ I couldn’t afford the last two letters of the word.” In my post-graduate years when I first started paying back school loans, I would tell my friends another joke: “Not only am I broke, but I actually owe broke. Being broke would actually be a step up.”

I’m happy to say that far better off now than I was back then. If debt is a sickness, then at worst I have seasonal allergies, not a raging fever and vomiting. However, there is always a healthier me to be had, and I’m always looking for that miracle cure, even though usually the most I’ve succeeded in getting is an allergy pill that provides temporary relief.

Financial health to me is living virtually debt-free. I say virtually, because realistically, the American Dream now requires American Express, or Visa, Mastercard, or some sort of established credit to prove that you are a biped and can purchase a bicycle. In addition, very few people can afford to pay outright cash for things like a house, a car or a college education. In plotting my course toward financial health, here are some valuable lessons I’ve learned:

• Pay your bills on time, every time. Nothing is as critical to good financial health as being a good steward toward your bills. Paying bills on time establishes good credit and good relations with the creditors, and by creditors, think of any good or service that you pay on a regular basis, whether it is revolving credit or utilities.
• Get a yearly printout of your credit report. To get an idea of where you want to be, you need a baseline to know where you are currently. Once items appear on your credit report, they stay on there for seven years, which is both long and short—long if you’re trying to establish credit, and short when you look back and see how far you’ve progressed.
• Get rid of the store credit cards. You were probably offered an incentive to get them—10% off your current purchase. Think about this carefully: what can a store credit card get you that a regular debit card can’t?
• Pay credit cards off each month. As a general rule, if you cannot afford to pay an item off in 30 days, don’t purchase it. The only exception I would make is for those finance options that give you a grace period with no interest. Pay whatever you purchased off prior to that 6-month period, then follow the general rule to the letter.

Financial health means that I can have essentially just my mortgage payments and educational loans to pay off along with the regular monthly household expenses. I’m not there yet; I have a few years before I gain the type of financial freedom I truly desire. Yet I know that continuing to keep a steady pace and not racking up any more bills will keep financial sickness at bay.