What are some signs that I’m financially healthy

2021-12-02   minute read

Kiu Lau

Lifestyle Debt

Debt Solutions

The average person spends most of their life chasing financial stability. We work, we get paid, and we spend our income on bills, household expenses, retirement savings — and, if we’re fortunate, maybe a little bit of leisure.

Mature couple enjoying being financially healthy

We may not feel like we’re getting ahead, but for many of us that’s ok; as long as we’re not falling behind.

What does it mean to be financially healthy, and how can you measure your own financial health?

The Financial Consumer Agency of Canada offers a wide range of educational tools to help Canadians improve their financial literacy, including:

  • Tips to manage your money,
  • Financial assessment tools and calculators, and
  • Savings, investment, and retirement planning resources

Financial wellness doesn’t happen overnight. It requires constant attention of all aspects of your finances and fine tuning your habits and processes along the way. Paying attention to the following signs can help you benchmark where your financial health is right now — and measure your improvement over the months and years ahead.  


A regular habit of budgeting and monitoring your spending every month is a good sign your financial health is trending in the right direction.

This means you know exactly how much you earn, how much you spend, and what you spend your money on. Your financial health markers are even more optimistic if you’re consistently sticking to your allowable expenses for each category and making a point to save for emergencies, retirement, investments, and big picture spending goals. 

Even the most financially healthy people overspend from time to time. However, they’re also vigilant about reviewing their budgets and making the necessary adjustments to ensure this doesn’t become a regular occurrence.

Credit card

Yes, financially healthy people can and do use credit cards — but they don’t rely on credit cards for every purchase. Nor do they use high-interest credit to cover any shortfalls in their budgets.

This means, first and foremost, you are paying the balance in full every month. Moreover, you only use the credit card for expenses which you have already accounted for in your budget (e.g., groceries.).  

If financially healthy people know they’ll be tempted to use their credit card for any non-budgeted expense, they will often choose to freeze the card or leave it at home.


Financially healthy people don’t just set money aside every paycheque (even if it’s only $20), they also have clear goals and objectives for the money they’re saving.

Emergency fund — You are actively working toward saving three to six months of living expenses to support yourself in a financial emergency such as a job loss or a home repair. Even if you’re not close to your goal, the fact that you’re working toward it is a good sign.

Big purchases and financial goals — You have purchases you’re looking forward to and chipping in a little bit each month to make these a reality. This could be something as “small” as a new smartphone or as big as a new car or a mortgage down payment.

Most importantly, you recognize that a regular savings habit is perhaps the most effective way to prevent yourself falling into the cycle of debt — resulting both from costs within and beyond your control.


Taking the long view of your financial health is another positive sign. It can be hard to plan for costs 30 days from now, let alone 30 years, but the small steps you take today will really pay off.

Registered plans and investments — You’re putting aside a percentage of your monthly income into a pension plan, registered retirement savings plan (RRSP), tax free savings account (TFSA), and/or other investment. You’re taking advantage of any employer matching contributions available to you.

Post-retirement debt — You’ve committed to retiring without debt and are taking steps to reduce any existing debt before you leave the workforce. If you’re nearing retirement and have debt, you’ve spoken with a Licensed Insolvency Trustee about options and opportunities to pay your debt down faster. If you have a mortgage, you have determined how old you will be when you pay it off and considered accelerated payment options (e.g., bi-weekly) to speed up the process.

Retirement planning advice — You have sought the advice of a financial planner or investment advisor to understand and support your retirement goals. You know roughly how much expect to spend in each year of retirement and have a plan to make that possible.

Credit report

Your credit history is not the be all, end all for your financial health — but it does offer some very important clues.

Checking your credit report regularly — You request your free credit report from both TransUnion Canada and Equifax Canada every year and review it for accuracy. You immediately reach out to the credit bureaus or your creditors to correct any errors or inaccuracies.

Understanding the factors impacting your credit — You know missing payments or making payments late, using more than 30 percent of your available credit, closing your oldest credit account, or frequently applying for new credit all have a negative impact on your credit report / score.

Credit score — Your credit score is above at least 650, which will allow you to qualify for most loans at a reasonable interest rate. You are taking steps to improve your credit score such as automating your monthly payments, using credit only for small / manageable purchases, and paying down your outstanding debt.  

Get a free checkup for your debt health

Our website has a range of self-service tools to help you manage your finances and assess your financial wellbeing. The MNP Debt Scale is one such resource which you may find especially useful to understand how debt is impacting your overall financial health.

The tool is quick, easy to use, and completely confidential. It can help determine not only whether debt is getting in the way of your financial goals — but specifically where you’re struggling and what you can do to improve your situation.

If the Debt Scale confirms your debt and financial health are not as vigorous as you’d like them to be, our Licensed Insolvency Trustees are always available for a Free Confidential Consultation. Together we’ll review your entire financial situation and discuss all the available options to help you begin moving in the right direction.

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