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How to Improve Your Financial Health in 3 Simple Steps

woman eating while happy about finances

Your financial health can affect your stress and well-being. When your finances are a mess, your life can feel like a mess, too. Good financial health, on the other hand, can free you to pursue the things you value most. 

Remember: Your Net Worth ≠ Your Self-Worth

Before examining your financial health, recognize that having a lot of money is not the same as achieving financial health. You can have a high income and still have poor financial health caused by overspending and debt. You can earn minimum wage but still have good financial health if you live within your means. 

How much you make (your net worth) is independent of your value as a human being. Having less money does not make you less deserving of respect, and having more does not make you better than others. 

Don’t criticize yourself if your financial health isn’t where you want it to be yet. You can still learn, grow, and change. 

Below we’ll detail three ways to improve your financial health

How Do You Achieve Financial Health?


Financial health is achieved when a combination of factors—including your income, expenses, credit score, and future financial plans—are in balance, and you can live within your means and pay off your debts. 

If your financial health has room for improvement, don’t feel discouraged. Just like with your physical health, you can improve your financial health over time with effort and consistency. 

Step 1: Know Where You Are Starting From

First things first, conduct a personal financial health check, evaluate your spending habits, and be honest with your self-assessment. 

Ponder these questions: 

  • What is my net worth? 
  • What is my monthly/yearly income? 
  • What are my monthly/yearly expenses? 
  • What are my debts? 
  • Do I have control over my day-to-day finances?
  • Would I be able to absorb a financial shock?
  • Am I able to make choices about my finances that enable me to enjoy life?

Once you know where you’re at, figure out where you want to go. Create realistic financial goals to help you get there. 

To create effective goals, ask yourself: 

  • Where do I want to be financially in one year? In five years? Ten? 
  • What do I need to do to achieve those goals? 
  • What do I need to stop doing to achieve those goals? 
  • Am I on track to meet my goals? 

Step 2: Create a Simple Budget

A budget is the first step to changing your finances. Don’t worry, it doesn’t need to be overly detailed. Start by calculating how much you spend and how much you make, and set limits, so your expenses don’t exceed your earnings. 

If you want tips on how to improve your budget, download a free budgeting app that gives you more insight into your expenses and habits. 

Step 3: Check Your Credit

Your credit score is important to your financial health because it affects your ability to secure a loan, buy a house, and more. You can check your credit score for free on many websites without affecting your score. You should check your score frequently and monitor any improvements or drops. This is something you can do each month that will improve your financial health.