Financial health indicators extend beyond being debt-free

Jakarta (ANTARA) - Financial planner Rista Zwestika suggests that an individual’s financial health indicators are not merely defined by being debt-free. “Not having instalments is indeed a good condition, but it is not sufficient to conclude that someone is financially healthy,” said the financial planner from the education and consultancy platform Finante.id when contacted by ANTARA on Monday.

“Financial health is not just about being debt-free, but also about having resilience, readiness to face risks, and the ability to achieve financial goals sustainably,” Rista stated. According to her, financial health is assessed through various aspects reflecting an individual’s ability to manage risks and achieve long-term financial objectives.

She noted that financial health indicators include the ability to meet daily routine needs without experiencing financial hardship. The availability of emergency funds is also a key measure of financial health. Emergency funds must be prepared as a financial buffer to face unexpected situations such as income reduction, urgent needs, or job loss.

The ability to consistently set aside a portion of income also reflects good financial health. Rista added that appropriate insurance services can serve as an option for protection against financial risks. Utilising insurance can help maintain financial stability when facing health issues or other risks that could affect a family’s financial condition.

Rista emphasised the importance of precision in financial planning and management to build resilience and financial health. A healthy financial condition will enable individuals and families to face various economic challenges.