Financial health is a crucial aspect of a person’s overall well-being. However, it often gets overlooked or misunderstood. Financial health refers to a person’s financial situation, including their ability to manage their finances effectively and achieve their goals. While financial health can mean different things to different people, several standard components are essential to achieving financial stability and success.
Eric Blue believes his company, Nevly, will become the gold standard in impacting a person’s financial health by utilizing consumer and economic data to deliver personalized insights to consumers that drive stronger financial habits. Set to launch later this year, the ARLO app will build off Nevly’s success with the launch of its Nevly Money product by allowing users access to the most powerful financial health-focused recommender engine in the market together with other financial tools, all conveniently located within the same mobile application.
8 Key Components of Financial Health
According to a recent article from NerdWallet, being financially healthy means a person is managing all aspects of their financial life, including achieving great credit, handling debt, building an emergency fund, and having a clear, defined path to retirement. However, these things can mean different things to different people.
Below are eight key components of financial health; which when evaluated together provide a strong view of a person’s financial stability and overall financial wellness.
1. Spending Money
One of the basic concepts of being financially healthy is to spend less money than is coming in. A person should aim to live within their means and begin taking note of everything they spend money on that might not be a necessity.
Individuals possess varying degrees of flexibility concerning their monthly spending. If there are expenditures that can be eliminated to improve one’s financial health immediately, it is advisable to do so.
Conversely, if one has a larger budget and greater financial flexibility, it is recommended that one exercise responsible spending habits. Overall, periodically reevaluating one’s financial standing and adjusting spending accordingly can help keep oneself on the right track for financial health.
2. Staying Up to Date on Bills
Monthly bills are standard for most people. Budgeting for them is relatively easy, but remembering when payment dates fall due can sometimes be difficult. Autopay is a great option in many instances, as companies allow people never to miss a payment again.
Being on time with bills also dramatically impacts an individual’s credit score. People routinely missing bill payments can see their score dip to a point where they are putting themselves at risk of not being able to get quality credit cards or any sizable loan.
3. Taking on and Managing Debt
Taking on money and staying financially healthy is doable if the debt is manageable. It becomes an issue when someone can’t make regular payments and avoid high interest.
Not all debt is the same, which also factors into financial health. Taking on debt for something home-related is a lot different from taking on debt to buy new clothes and shoes. Eric Blue believes that people using the ARLO app will get a chance to manage their debt better because the app will focus on providing consumers with actionable, personalized insights that allow them to better understand the realities of different debt products.
If high-interest debt consumes a person’s life with hefty monthly payments, Eric Blue recommends making a short-term goal to pay that off. This might mean taking money from other budget parts (spending and savings) to work quickly. Consistently paying high-interest rates forces many people into a spiral of debt.
4. Savings Goals
It’s never too early to start looking at establishing savings goals. The sooner a person begins, the easier it is to build up a sizable amount of money.
The ARLO app helps people identify different savings goals – whether they be short, medium or long-term goals and then provides them with a personalized approach to how to reach those goals. Depending on the size of the goal and the timelinerk, a plan can be devised to determine what monthly contributions must be made. It’s usually lower than people think when starting early.
5. Liquid Savings
Saving for retirement and other long-term plans is essential, as is having some liquid savings. This type of savings helps because it can be accessed in emergencies or financial crises. The general rule is to set aside at least three months of living expenses in liquid savings.
This cushion will allow people to maintain financial health while working through a challenging situation. Challenges may include a medical emergency, a job layoff, home repairs, or anything unexpected. The difference between liquid savings and a long-term savings account is that liquid savings are more easily accessible.
6. Managing Credit and Improving One’s Credit Score
Love them or hate them, credit scores still play a significant role in a person’s financial health. An individual should be looking to constantly improve their credit score, especially if it’s below 700. That’s currently considered the standard between healthy and in need of improvement.
Credit scores become a bigger deal with large purchases like a vehicle or a home, though smaller purchases like cell phones or applying for a credit card usually require a credit check too.
Eric Blue has developed features within the ARLO app that allow people to explore, repair, maintain, and protect their credit scores. Credit scores are linked to an individual, so controlling them is crucial.
7. Having Quality Insurance Coverage
Insurance coverage is available for virtually anything. The most standard type of insurance is for individuals covering their health, vehicle, and home. All this can be expensive, but it’s a hedge against anything significant happening that can put a person in financial ruin.
There are more options out there than ever before to get insurance coverage. Eric Blue knows that people using the ARLO app when it launches can look at insurance options and see what works best for them. Getting a chance to lower the monthly premium without sacrificing coverage can be very enticing.
8. Financial Planning
After looking at all components, financial planning remains a significant component of overall financial health. The most basic form of financial planning is to create a budget and meet those goals as consistently as possible. Having a great budget will give an opportunity to have spending money, invest in creative options, and save for the future.
Eric Blue believes Nevly will become a powerful fintech solution for many looking to plan their finances better. The ease of using an app instead of traditional banking methods will encourage more time for planning.
How Nevly Plans to Take Financial Health to the Next Level
Eric Blue knows that fintech is the way of the future for individuals handling their finances. He wanted to develop a better way to manage financial health and take it to the next level.
He officially launched Nevly in 2021, and some of the early inspiration is linked directly to the struggles he witnessed his family coping with as a young child and teenager. He didn’t know how to help his mother climb out of debt, avoid the paycheck-to-paycheck stress, and save for a better future. Now, he has developed Nevly to provide accessible knowledge and technology to make an impact on others.
Nevly leverages technology to make money easier to manage for individuals. Instead of looking to profit from mistakes people make, it’s about providing education and easy-to-use tools in one app.
With the ARLO app, a person can apply for a debit card, build up their credit, monitor their credit, budget the right way, and handle everyday banking needs. Eric Blue looks forward to helping people with all the critical components with the official launch of this revolutionary app soon.