Not a long post today. Remember the finance posts you see on my blog are opinion pieces and not meant as financial advice. When making financial decisions you should seek out several resources and do your diligence and research. Now that out of the way there is one simple way to determine if you are healthy financially.
Do you pay the full balance of your credit card every month?
If you pay your credit card balance every month and never carry a balance this means you have enough income to cover all of your expenses. Now this has to be consistent, you cannot do it one month and then the other 11 not do it, but if you are paying off your CC balance every month this is a clear indication that you are healthy financially.
You see millions, tens of millions of people actually cannot pay their CC balances off every month. This means they spend more than they make, and that is the simplest way to know you are unhealthy financially. Simply put, if you can pay everything month to month you have created a sustainable financial life. Now do not confuse this with being wealthy, that is completely different.
It does mean that you are financially healthy, now can you be healthier? Sure. You see what happens ideally is after you pay everything off every month you have money left over to save. That is how you move into wealth building and that is another post altogether. Remember this is simple, do not over think it. If you pay off all your CC balances monthly it is highly likely you are healthy financially.
You are living within your means. Now if you are skipping car payments and mortgage payments to make these CC payments that’s a problem but generally people skimp on the CC payments because there is a minimum payment which enables them to retain the balance to apply to other non-minimum payment bills, like mortgages.
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