Financial Intelligence: The financial number line
Financial Status Number line Knowing your financial status is the most critical stage on your journey to proper financial management. You cannot move on to the next step if you do not know exactly where you are. Having an idea of which specific financial status you are currently in will enable you to take stock and move into a better one. There are basically five financial statuses: 1. Deficit 2. Neutral 3.Financial Security 4. Financial Independence 5. Financial Freedom. Definitions 1 . Deficit: Deficit is where your monthly expenses far exceed your total income and hence you either have to borrow to meet your financial obligations or you consistently live an impoverished life at the latter end of the month. More often than not anyone who is in a deficit financial status stage has debt and poor financial habits. 2. Neutral or Balanced: This is when your expenses are always equal to your income. With this you are always at zero. In effect you always s...