Financial Health | Credential Index

Your Financial Health

Understand where you are in your journey so you know what steps to take next.

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Edited by other Updated Feb 12, 2026 The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Financial health simply measures your ability to handle financial stressors and reach your long-term goals. The areas of financial health typically considered are: Savings and debt paydown: Are you able to cover your needs, your wants and still have enough to build savings and pay down debt over time? The 50/30/20 budget is a good measure. Savings and debt paydown: Debt-to-income ratio: This comparison of your monthly debt payments to your monthly gross income gives you a good idea of how manageable your debt load is. It's also a common measure used by creditors in making approval decisions. Debt-to-income ratio: Credit score: Even if you don't plan to apply for more credit, a good or excellent score can play a role in things like apartment applications, insurance costs, utility deposits and more. Credit score: Emergency fund: Having enough in the bank to weather financial shocks protects you from debt spirals and the credit score damage that comes from missing bill payments. Emergency fund: Insurance: This protects assets — such as vehicles, personal possessions and your home — and it also protects dependents in case you're unable to work. Insurance: Financial planning: Staying financially healthy means saving toward retirement, working on estate planning and more. Financial planning:

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How to improve your financial health

For most people, attaining financial health is a journey — one that lasts a lifetime. Very few people are lucky enough to have instant security from generational wealth or a massive lottery jackpot. Instead, the progression tends to look like this: build a foundation, stack up wins and make the most of your money,

Build a foundation

Strengthening foundations includes creating an emergency fund, building your credit score and balancing spending and expenses. It's never too early — or late — to start planning for retirement, so that your savings have time to take advantage of the magic of compound interest. These guides can help you handle basics, like choosing a bank, getting some savings going and learning how to manage money: Emergency Fund: What It Is and How to Build One: Research shows that even a few hundred dollars in reserve can mean budget shocks don’t derail your life. How to Build a Budget: A plan for maximizing your money doesn’t have to be complex. What You Need to Know About Building Credit: Building your score can save you money and let you borrow at better rates. » MORE: Get your free credit score with NerdWallet » MORE: Setbacks can hit anyone, at any time. If you're having trouble keeping up with your bills and don’t have a financial cushion, explore these resources that may help you and lay the groundwork for greater financial security: How to Pay Bills When You Can’t Pay Your Bills: If you can't cover everything, check out these sources of help and strategies to minimize the fallout. 6 Ways to Get Free Money From the Government: Programs include help with utility costs, child care, college — even help with a down payment on a house. Beware of Predatory Lenders: Know the warning signs of a toxic loan.

Stack up wins

As you gain momentum, continue to grow your financial stability. This could mean things like paying down debt balances and knowing what your needs will be in retirement. Paying bills on time and keeping track of your credit score can help push it higher, which gives you more financial choice. You may be thriving in some areas but not yet on top of others. Here are ways to address possible financial pain points and shore up your security.

Manage debt

Tools and Tips to Pay Off Debt: Learn strategies to speed up debt payoff. Understanding Debt Relief: Struggling with debt? Learn options for help, plus their pros and cons.

Build your credit score

How to Build Credit Fast: Adding more points to your score saves you money and unlocks access to things you want. How to Rebuild Your Credit: If you’ve made some missteps, you can recover — these strategies will help.

Work toward financial goals

How to Manage Your Money: These strategies help you make sure each dollar does the most for you. Intro to Retirement Planning: Start where you are and with what you have. Every bit helps. Beginner Guide to Investing: What to know about goals, timelines and the amount of risk that makes sense for you. College Savings Strategies: Explore the ways you can set aside money over time and find the best plan.

Save for a home

First-Time Home Buyer Guide: Those new to the housing market have some key help. Buying a Home With Bad Credit: It is possible — here’s what to know. How to Save for a Down Payment: You might not need as much as you think. Down Payment Assistance: Getting Help Buying a House: These programs can help, even if you’re not new to the housing market. How Much House Can I Afford? Enter your income, monthly debt payments, and down payment to get your answer.

Make the most of your money

Those who are financially healthy are successfully managing all aspects of their financial life. They have good to excellent credit, a handle on debt, an emergency fund and a retirement fund. The goal for you, if you fall in this category, is staying the course and reaching your financial goals. Here are some resources to maximize your efforts and ensure you’re getting the most out of the optimal position you’re in.

Maintain financial health

The Benefits of Diversification: Why financial pros suggest you spread investment dollars across a range of assets to reduce investment risk. Choosing a Financial Advisor: Find a professional to help you meet your goals.

Save and invest for retirement

The Best Retirement Investments: It’s all about how you account for savings in your budget. IRAs vs. 401(k): How to Choose: How to weigh what account is best for you. How to Invest in Stocks: Get started with an online brokerage account — it’s easier than you might think. Best Investments for Any Age or Income: Fine-tune your approach, depending on your circumstances. Choosing the Best Index Funds: It all starts with deciding a goal for your money. Explore more on About the author Neidel Courtney Neidel is an assigning editor for the core personal finance team at NerdWallet. She joined NerdWallet in 2014 and spent six years writing about shopping, budgeting and money-saving strategies before being promoted to editor. Courtney has been interviewed as a retail authority by "Good Morning America," Cheddar and CBSN. Her prior experience includes freelance writing for California newspapers. Published in How to improve your financial health Build a foundation Stack up wins Make the most of your money How to Pay Off Debt: Top Strategies for 2026 Credit Score Ranges: What They Mean and How They Work How to Budget Money in 5 Steps 28 Proven Ways to Save Money How to Set Financial Goals: A Step-By-Step Guide By Lauren Schwahn Free Budget Template: A Simple Tool to Help You Track Your Money By Lauren Schwahn, Amanda Barroso How to save for retirement in 7 steps By June Sham How to Pay Off Debt: Top Strategies for 2026 By Lauren Schwahn, Jackie Veling Do You Need a Financial Advisor? 7 Ways to Tell By Taryn Phaneuf