You may not realize it but it is not only the health and wellness aspect in life which needs to be diagnosed to see if it is in proper order. We also need to check our financial health. This is done so you will not be experiencing problems later. It also helps you to be ready to confront issues and concerns, whether it is a minor or major problem. Many people do not know that we can actually diagnose your financial health. What is financial health? It is just simply your ability to solve financial problems without resorting to instant loans like cash advances.
4 Things to Check for Financial Health
Checking your financial health is not limited to balancing your check book or monitoring your monthlyly pay slip. It is not even about paying your debts and seeing to it that you have extra money on hand to pay for any temporaryities. Here are the ways to check if your financial position is in good condition:
- Check your credit score. This is one of the utmost priorities because having a good credit rating makes you a reliable borrower and your credit opportunities is wide. The chances of being rejected with loan application also becomes low.
- Check your savings. The amount of money you save must mean something. For example, can your rely on it for daily expenses and other expenditures if you no longer have a job? For how long? Can I withdraw a portion and invest it somewhere else without making you financially insecure? There are situations when interest on savings are really low that it is pointless to save. These are some of the questions that you need to ask about your savings.
- Check your investment. Let us presume that many of your investments are for the long term. However, you need to determine if you can easily convert it to cash as soon as possible. If so, by how much? Also, you need to check your investments and see if you can sell some in order to prevent huge losses if some of your stocks are affected by current economic conditions.
- Check your credit availability. What are your sources of credit if you encounter emergency situations? Indeed, it is quite ironic that sources of credit are one of the indicators of financial health. Financial management teach us that in some cases, it is more financially rewarding to take out a loan instead of debts accruing assets to generate cash. For example, why unload your stocks if it is approaching 30 percent per annual on dividends when you only need several hundred and there might be some friends who are generous enough to lend you the money interest free?
There is nothing wrong if there are borrowers taking their chances with cash advances and other types of instant loans. It is a matter of choice and there are reasons that they do so. One of such reasons could be that they can not divest their investments and convert it to cash as those are approaching huge debts so they are better off clinging to such stocks and relying instead on cash advance as the means to resolve temporary cash problems.