Financial health is the ability to attract, retain, diversify and grow financial resources with as minimal losses as possible. It is all about building flexibility and durability within one's cashflows and asset management.
In its core, financial health is about stability to prevail any economic condition with ease. There are various ways, indicators and tools to check for financial health such as balancing between income and expenditure for fixed income earners, tracking spending habits using digital tools for individuals and financial audits for organizations.
There are factors that can determine either positive or negative financial health. They include; income, financial literacy, personal discipline , proper regulations/monitoring and evaluation techniques, socio economic background, responsibilities and expenses.
Various components of financial health include:
Income generation
wealth creation
Managing debt
Expense management
Response to Inflation
Liquidity
Solvency
Risk assessment and management