Your financial health does not depend only on checkbook or pay slip monitoring. It is also not limited to paying debts or setting up an emergency fund. Here’s your handy financial health diagnostic kit.
1. Always monitor your credit rating. A good credit standing provides you opportunities to borrow when tough times come. A good credit score also reduces the chance to get your loan application rejected.
2. Keep track of your savings. It should have at least three months of your salary. That should be enough to defray your family’s expenses should you lose your job until you find a new one. You can place the excess money on a profitable investment.
3. Watch your investments. You should have both short-term and long-term investments. As they mature, determine if you can sell them. It will provide instant money while allowing you to look into other investment opportunities.
4. Know your available credit facility. In the eventuality of an emergency, you should have a credit line open. This might sound ironic, but an available credit facility is one of the indications of a healthy personal finance. According to financial experts, there are times when applying for a loan is better than divesting your assets in order to generate instant cash. This is especially true when you have close associations who are willing to lend you money without or at a low interest rate.
Cash advances may give temporary relief during times of crises. However, being financially healthy is better when you consider the long-term benefits. With this handy financial health diagnostic kit, you can keep your personal finance healthy and solve future financial woes.