Being financially healthy requires more than making enough money to cover your expenses. We’ve probably all heard stories about lottery winners, professional athletes, and other millionaires who eventually declared for bankruptcy; though they had the money, they didn’t have the right mindset and spending habits to avoid financial trouble.

Your philosophy on money and personal finance has a great impact on your financial success. If money is simply something you spend to acquire things, you may never be in a financially healthy situation, no matter how large your income is. So ask yourself: do you have a financially healthy mindset? If you’re not sure, check out the statements below. Which of them are true for you?

• I know where all important papers are, and have a list of them showing their location if someone else needed to locate them in an emergency.
• I have at least six-months-worth of living expenses saved in an emergency day fund.
• I have established short-term and long-term financial goals and put them in writing.
• In any given time period, I don’t spend more money than I make.
• I have a budget.
• I have a regular savings plan.
• I have established a maximum amount for discretionary expenses each month, and stay within that limit.
• I limit impulse purchases by allowing a 24 hour “cooling off period” on anything over $100.
• I know within $100 how much is spent on required expenses (e.g. utilities, food, insurance, loan payments) each month.
• I am current on all debt and credit card payments.
• I check my credit rating every three years or more, and before making a purchase such as a car or house.
• I review my financial plan regularly and make adjustments as my needs change.

Don’t worry if most or none of these statements are true for you right now. Simply by recognizing which of these statements don’t apply to you, you’ve identified ways to improve your financial health. Of course, this means the next step is to start putting these into practice!

No matter how much or how little money you may have, a financial plan and good financial habits are important to your financial health. As you work through your financial situation, think about your spending habits and philosophy on money and personal finance. Are there any changes you need to make to become financially healthier?

Covenant Trust Company is a financial services company owned by the Evangelical Covenant Church and its affiliates. Our services are available to anyone in need of asset management, retirement planning, legacy planning, gift planning, or trust services. In addition, we seek opportunities to encourage and promote healthy financial habits, and keep a personal finance blog at www.covtrustblog.com.

Photo: Flickr