Financial stability refers to a condition where an individual, household, or economy can manage its financial obligations without excessive stress. It involves having a steady income, manageable debt levels, and sufficient savings to cover unexpected expenses. This stability allows for better planning and investment in future opportunities. In the context of an economy, financial stability means that financial institutions, such as banks and markets, operate effectively without significant disruptions. It ensures that the financial system can withstand shocks, maintain confidence, and support economic growth. Key indicators of financial stability include low inflation, stable employment rates, and healthy credit markets.