When we use the word, “Financial health” we don’t mean you have billions in your bank account. We simply mean that whatever amount you have is more than enough to meet all your essential needs and then some.
In this instance, there are no absolutes. Instead, we have a spectrum, meaning that there are several levels
Level 1 - Chaos
At this stage, no matter how much you earn from your full time jobs or side gigs, money will never be enough to meet all your monthly needs.
No savings, having to sweat blood to meet up with taxes, electricity, and feeding.
You might even find yourself having to borrow money from any possible source in order to survive. At this point you find yourself wondering, how come nothing has changed since I was earning half of my current pay?
Possible causes: If you find yourself in this level, there are diverse reasons for this to be happening. They include
- Health issues
- Economic and policy somersaults
- Black tax
- Extravagant spending
- Lack of planning and budgeting
- Lack of financial literacy
It goes without saying that no one wants to be in this stage, but what’s even scarier is the fact that we don’t always realise that we’re in this state. When we do, we do what millions if humans do when confronted with a bad situation: We deny.
Level 2 - Avoidance
Let’s face it, no one likes to be told they’re not they’re in financial soup. When someone does tell us, we keep on doubting and denying and end up not taking any action to fix this problem.
The renowned Parween Mander describes this as a disorder, a pattern of self-destructive financial behaviours. You’re stuck doing impractical and downright useless things that won’t get you anywhere near where you want to be financial.
Maybe now you’re able to save a little, and you try not to spend as much, but your finances are still disorganised, you have some cash scattered here and there between three commercial banks, one Neobank, and a fintech wallet. Oh, don’t forget those you pull out of your trousers before or after laundry.
As bleak as this stage looks, it could lead you to an important stage. One where you become fully aware of the problem.
Level 3 - Awareness
After taking a beating at the hands of the legendary SAPA (the urban personification of being penniless), or getting an earful from an expert like the silly author of this article, then you get to the third level of awareness.
You realize that things will not always be rosy, you won’t always be in paid employment, so you need to take your finances by the scruff of the neck and start dragging them to a safe haven.
Most times, external events could trigger this: It could be a job loss like I alluded to above, yet another policy somersault from your government, a health challenge, or the loss of a loved one.
Whatever the cause, you become curious about the best way to get out of the financial quagmire, instead of avoiding it. It’s only after harnessing this state you get to achieve some form of stability.
Level 4 - Stability
When you start inputting some basic financial principles into your life, you begin to achieve some form of stability. This doesn’t mean that all your troubles are over, but the clarity and motivation you got from being aware gets you in the right direction.
After much studying, you realize you need to put financial measures in place to make sure life and your government, do not blindside you.
You now avoid debt and reduce extravagant spending, then you start cautiously building assets to secure your future and that of your family.
As you go, relief starts settling in, and you move on to the next stage of financial security.
Level 5 - Financial Security
You’ve moved past being stable to having your plans firing on all cylinders. You’ve saved up buttloads of cash and invested in enough assets to approach financial independence.
At this stage, your focus is largely on what the future has to hold, and a little fear of the unknown. You start thinking about your kids and making sure they don’t suffer through the ravages of life.
At this stage, fear begins to set in once again. The human mind seems to find reasons to be afraid a lot. You enter the bondage of freedom
Level 6 - Financial Freedom
When you’re financially free, you can do whatever you want to do with money and it won’t put a dent in your account. You could wake up one morning and decide to acquire one of the world’s most popular social media platform.
You’re close to the top of Maslow’s hierarchy of needs so you begin to see the big picture. You embark on ambitious projects, all with one niggling fear: What if this all goes away?
What if something bad happens and all this wealth I’ve spent years building disappears into thin air? What if I don’t have I don’t have enough to withstand a recession?
At this point, you’d need more investment advice, but it will also be important to gain new experiences from travelling or building new ventures. At this point, you’d have to stop caring about money all the the forces beyond your control, and start focusing on impacting your generation.
Level 7 - Fulfillment
When you come to grips with the fear of the unknown, then we can say you’ve achieved financial fulfillment. Money becomes of little consequence, and you wear an infectious confidence that would radiant to the people around you.
Rather than looking for the next business venture, you start investing in the people around you, in your society, and you begin to help others start that long arduous journey to financial fulfillment.
You start giving to charities, setting up project and impact focused foundations. To use the modern day parlance, you become a philanthropist.
At this stage, even if earth shaking events occur, you have an unshakeable peace of mind and enough social capital to bounce back.
Staggeringly, you might not even be making as much money as someone in level one, but you’ve built enough to know that you’ll never lack for anything you need, and you can impact the people around you.
Don’t we all want to get to this financial state? Well, start that journey with Evi today.