Financial health is the state of one’s personal financial situation. Financial health consists of many aspects including the amount of savings you have, how much you’re putting away for retirement, and how much of your income you are spending on fixed or non-discretionary expenses.

Non-discretionary spending is spending that is required by a budget, contract, or other commitment. This is something that you have no choice of cutting back on to increase your savings. Whatever money you can put aside comes after you have met all of these expenses.


Being financially responsible doesn’t mean finding a way to cut costs every which way, it means that the decisions you take are the best in the interest of you and your future. It doesn’t make sense to not get health insurance because you do not fall sick that often and would like to cut back on your expenses. It doesn’t work that way.

When you research the options before you commit to an expense that can add up to your non-discretionary spending, try being thorough. You do not want to have to go through every one of your expenses that fall under this category whenever you set out to make a budget.

Knowing that a portion of your money that you spend on your non-discretionary commitments is being well-spent is important for you to focus on your actual problem areas. This is important for you to gain financial security.

Having financial security is important for living without stress, that is the ultimate goal of earning enough and spending responsibly. Being prepared for anything that comes your way in any unfortunate circumstance, relies a lot on your monetary health, like losing your job, accident, operation, urgent home repairs, etc.

What we need to learn to wrap our heads around is that financial independence is a privilege that we earn ourselves most of the time. Choosing to live debt-free, having enough funds, cutting back on unnecessary purchases is a choice people don’t think they have; they try to tackle the big expenses whenever they feel strained financially.

Most of your big expenses are usually non-discretionary, so being mindful of what you choose to commit to is very important for the peace of your mind and not keep coming back to it every time you revise your budget.

Final Thoughts

People either struggle with living paycheck to paycheck or bury themselves under mountains of debt trying to buy a lifestyle they can’t afford, this is what you should be focusing on. This is where your budgeting plans should get inspiration from because these are the problems you need to be getting rid of. Financial independence doesn’t come from not spending at all, it comes from spending wisely.