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If you trade the forex markets regularly, chances are that a lot of your trading is of the short-term variety; i. From my experience, there is one major flaw with this type of trading: h igh-speed computers and algorithms will spot these patterns faster than you ever will. When I initially started trading, my strategy was similar to that of many short-term traders. That is, analyze the technicals to decide on a long or short position or even no position in the absence of a clear trendand then wait for the all-important breakout, i. I can't tell you how many times I would open a position after a breakout, only for the price to move back in the opposite direction - with my stop loss closing me out of the trade. More often than not, the traders who make the money are those who are adept at anticipating such a breakout before it happens.

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Financial health examples

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This includes investing in a retirement fund in your 30s or in health insurance when you are young and fit. By automating these savings, we can ensure that our biases do not stop us from making these investments. You can set up automatic transfers in sync with your income cycle to ensure that these allocations are made as soon as you have sufficient funds in your account.

It also ensures that you are never late in making payments or premiums. It also ensures that you have a clear limitation on your spending potential, it helps you maintain financial discipline. How diverse is your portfolio? You must have a pretty good idea by now, thanks to the portfolio review. As you take a good look at your overall monetary status, this is a perfect opportunity to further expand it. But a portfolio redistribution must stay cognizant of current financial conditions and your own risk profile.

For instance, while pharma companies have taken the lead last year, in sectors like fintech, real estate, manufacturing, logistics, and automotive are expected to pick up. A flurry of IPOs are also expected to hit the market this year, offering attractive investment opportunities in high growth companies. The growth of startups and the flow of investment in the digital economy can help you expand your portfolio by including more small-cap, high growth companies.

With some of these stocks picking up, this is the perfect opportunity to further diversify your equity assets. At the same time, investment in big companies, government securities, and mutual funds will ensure a more stable balancing act. Similarly, you can look at expanding to different markets, such as the US to limit your exposure to a single economy. The last two years have shown us the importance of savings and a nest egg that can help you through the tough times.

An emergency fund is designed to provide us with a financial fallback in case of an adverse event, such as a sudden loss of income. It can also include unplanned big expenses, such as major repairs to your car. Loss of income or sudden expenses can not only impact our overall lifestyle, it can also put at risk our portfolio as we fail to make timely payments or are forced to cash in some of them in order to meet our liabilities.

An emergency fund is meant to provide for all these expenses in the short term. It can be three to six months of your salary depending on your income and expenses. People with a high number of liabilities should, therefore, build a fund that can withstand at least a six-month long loss of income. To avoid overspending from the fund, it is best to park it in a separate savings account, especially if the fund is fairly small.

A debt may seem like a heavy burden, but it is often a necessary part of our modern life. And in some cases, it may even be better than making heavy cash payments for every purchase. Prioritise your debt as per the interest rates. However, low or no interest debts can be paid as per schedule and may help you manage your finances in a more planned manner. Reviewing your debts and payments is necessary for working out your budget. These will help in making a more realistic budget, one that you can stick to.

You can keep tweaking it as you rework your investment decisions through the year. Finally, let be the year when you work towards improving your financial literacy. A strong financial health has a direct impact on our wellbeing. It can help us to meet our essential and non-essential needs, explore our potential to the full, and allow us to lead a life on our own terms.

As we grow older, it allows us to take time off when needed, provide for our loved ones, and ensure good medical support. Financial literacy is the first step towards educating yourself about money and how it works. Today, you also have easy access to professional help in managing your finances through multiple platforms, whether digital or through professionals. So, take the time to understand your own behaviour, goals, and how to align the two.

He started his journey towards building technology-led solutions for the financial services sector in with Miles Software and is actively involved in investing in finance companies. At Forbes Advisor, he is determined to help readers declutter complex financial jargons and do his bit for India's financial literacy. Select Region. United States. United Kingdom. Advisor Personal Finance. Published: Jan 1, , am. Milan Ganatra Contributor.

Armaan Joshi Editor. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. The pandemic of and the subsequent economic crisis led to some unexpected outcomes in consumer finance, including Americans trying to get out of credit-card debt. The rise of retail investing also reflects a growing interest in financial management, which is a part of financial health.

In , individual investors opened more than 10 million new brokerage accounts , more than any year in history. For financial service providers, the implication is clear: financial health is a growing priority for Americans—and many of them actually wish their banks would help them improve it.

Increasingly, people are turning to financial institutions to help them improve their financial health. A Accenture study found that half of consumers are interested in receiving financial advice from their financial service providers, including on how to manage their money and improve their spending habits.

It also showed that people are more willing to share data in exchange for better advice. Customers are moving to financial services providers that help them. This is shown by the rapid growth of Chime , a digital bank that offers financial health-related services including fee-free overdrafts, early paycheck access, and help to build credit history and grow savings. These offerings have helped Chime acquire over 4. A Gallup survey shows that customers who feel that their primary bank supports their financial well-being are more satisfied with it—and hold a higher percentage of their investments there.

Many banks already grasp the connection between consumer financial health and their bottom line. For example, USAA offers its customers a financial readiness action plan. The program takes customers through an assessment of their financial health and delivers an action plan to improve it. With the rise of consumer-first fintechs, banks are facing increased competition—and the dynamics of consumers paying fees for things like overdrafts or minimum balances are changing.

As this trend continues, the banks that help consumers overcome financial challenges will win their hearts, minds, and loyalty; and expand into new market segments. The data bear this out. The US Financial Health Pulse showed that people whose primary institution helps them improve their financial health are 1.

The market for financial health advice is vast. There are hundreds of millions of Americans who are financially coping or vulnerable—and many need that help from their financial institutions. Investing in customer financial health early can help banks build and maintain a competitive advantage in a crowded market. They are the nexus point for money coming in and going out, which gives banks valuable data they can use to help their customers gain a better picture of their finances:.

In addition to better serving customers and increasing brand loyalty, financial institutions can expect the following results by helping their customers improve their financial health:. Larger balance sheets — When customers are financially healthy, they tend to have more cash on hand. This means a larger deposit base for the bank and the opportunity to sell more products, such as loans and investments. Stronger loan portfolios — Financially healthy customers are unlikely to default on their debts, which means lower delinquency rates for the financial institutions that serve them.

Financially healthy customers that avoid these issues are less likely to do so. Additionally, banks will have reduced collection costs when financially healthy customers are better able to pay their bills on time. For banks to help customers build up their financial health, they will need to evolve their culture, product mix, fee structures, and other facets of their business.

Here are three steps financial institutions can follow to determine how to help customers improve their financial health. Understand customer challenges. Financial institutions start to help customers improve their financial health by first understanding their challenges and goals.

Surveying customers is one way to identify pain points that need to be addressed. Banks may find that some customers struggle to manage their cash flow while others have a tough time saving for retirement. Another way to gain insights into the challenges your customers face is to analyze their transactional data—which can provide more concrete, nuanced insights. This includes any information you currently have about your customers, including credits, debits, bill-pay activity, and online banking use.

An analysis of this data can paint a long-term picture of financial health, while a survey is more of a moment-in-time snapshot. A good way to start is by reviewing your current product suite and identifying gaps and pain points—in particular with regard to the challenges your customers report. You may find that adding new features or making small adjustments can go a long way towards addressing them.

A part of your financial health strategy will be to decide whether to build solutions yourself, partner with 3rd parties, or understand that outside fintech apps will better serve this need and work around that. For banks that need additional resources to create financial-health products and services, Jack Henry and OpenClose are two companies that provide white-label solutions for banks.

Additionally, Plaid is a financial data-sharing platform that offers connections to many different types of tools that help consumers build financial health. If helping your users connect to outside apps and services is a part of your financial-health strategy, check out the Plaid Exchange API. Integrating financial health into your key performance indicators KPIs is a critical step towards incorporating customer financial wellness into the company.

Rather, it should be embraced as a core value for the entire business, and be reflected in the KPIs. Normalizing this with your company will require things like:. As a first step, consider tracking outcomes that directly impact financial health, such as whether a recently released automated savings product is actually helping customers increase their savings balance.

These discussions can deepen customer relationships while helping you understand the impact your efforts are creating. Assembling customer focus groups to give feedback on your financial-health products and services. Utilizing short, online mini-surveys that assess the impact your financial health products and services have throughout the different steps of the customer journey. While financial institutions are well-placed to help consumers improve their financial health, they are not the only ones.

Fintech startups are aiming to gain market share in several areas related to financial health. Budgeting: Companies like TrueBill, Copilot, and You Need a Budget help users to understand their cash flow and build a budget, even offering personalized advice. Automated savings and investing: Stash, Qapital, and Digit offer automated savings, helping users save for a rainy day and build their nest egg.

Atom Finance, Betterment, and Wealthfront help users make better investment decisions. Paying off debt: Tally, ChangEd, and Qoins help users pay down their debt, often by rounding up transactions to the nearest dollar and putting the spare change toward student loans or credit cards. Consider the non-sufficient funds NSF fees and overdraft fees that many banks charge when customers spend more than they have in their accounts.

By contrast, fintechs have generated tremendous growth by aligning themselves with the financial interests of consumers. For example, Brigit helps people avoid overdraft fees and predatory lending. If financial institutions can take their cue from Brigit and build products that help customers improve their financial health, they will take advantage of this significant business opportunity rather than losing market share to those who do.

Erica helps mobile banking users understand their finances with fintech-like services such as monthly spending snapshots, recurring-charges monitoring, and scheduled bill-payment reminders. Consumers increasingly look to their banks to help them improve their financial health. That said, changing consumer expectations are not necessarily bad news for incumbents.

For financial institutions, the way forward is to help customers achieve better financial health—this can be done through internal initiatives, partnerships, or access to external financial tools that can help. Those who make it a priority can expect increased growth, engagement, and retention. Read article. Learn more.

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key takeaways. The state and stability of an individual's personal finances and financial affairs are called their financial health. Typical signs of strong financial health include. 5 Rules to Improve Your Financial Health · 1. Do the Math—Net Worth and Personal Budgets · 2. Recognize and Manage Lifestyle Inflation · 3. Financial health is a state of being in which a person, business, or financial institution measures.