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Everyone works hard to make the right financial decisions in their lives. Doing so involves adopting practices like saving money and making secure investments. However, it’s always essential that you keep track of your financial health from time to time. In comparative terms, this is similar to what you would be doing if you were working on your physique. Once you have started making the hard yard, you will eventually take a look back to see whether or not your body is in better shape.
This article is a guide on how financial institutions assess your financial health, and what you can do to improve it over time.
Factors Taken Into Account by Financial Institutions While Assessing Your Financial Health
1. Net Worth
Evaluating the net worth is the most convenient way to find out about an individual’s financial health. Bankers and financial regulators most commonly practice it. Calculating your net worth is a straightforward process that saves a great deal of time. The bankers add up all of your assets while ticking off the liabilities to determine your net worth.
You can count on all that you think are your assets, e.g., cash, properties, a car, and much more. Similarly, you must consider all your loans and mortgage dues as your liabilities. If your net worth continues to increase despite any liabilities, financial companies and banks will perceive you as reliable. But in the opposite case, your financial health becomes a cause for concern.
Additionally, net worth does not discriminate among asset types – if you have limited funds in the bank, but own expensive houses or cars, it might project you as a financially healthy individual on paper. However, this isn’t always the case, as sometimes, financial institutions could view this as a concern.
2. Evaluating Savings Rate
Your savings rate can also reveal your financial standing at a given point in time. The specific portion of the monthly salary you save in your bank account constitutes your savings rate. While it is possible to calculate the savings rate by your gross or net income, opting for the former is less complicated if there is any pre-tax subtraction.
Bankers monitor your savings rate as an indication of your financial health. However, you don’t have to completely cut yourself off any expenses; the key here is to save at least 20% of your monthly income every month.
3. Maintaining Debt to Income Ratio
The debt to income (DTI) ratio is particularly relevant when you apply for debt consolidation loans bad credit. You can also figure out your DTI ratio by dividing all your monthly debt payments with your gross income. The rule of thumb is that an individual’s debt can be manageable if the DTI ratio is less than 30%.
Additionally, other policies need to be closely studied before setting out to determine the DTI ratio, such as:
- The debt type becomes a deciding factor while calculating an individual’s DTI ratio. Bankers will deem a DTI ratio of 25% to be excellent if it features a mortgage. However, if the ratio features credit card debts, the opposite will hold true.
- The overall amount of each debt is essential, despite the DTI ratio being calculated with monthly payment amounts. Specific debts that require low monthly payments can impact you negatively due to the interest accrued on them.
Different Ways to Improve Your Credit Score or Financial Wealth
Despite your credit score not being the ultimate gauge of one’s financial health, it does reflect your credit history. It becomes crucial when you’re applying for a loan or a credit card. Unlike all other methods listed above, the average individual cannot calculate their credit scores; this is done by specific financial regulators.
Payday loans direct lenders will rely on the credit score calculated by these financial regulators to determine your creditworthiness.
While we have spoken in detail about how financial institutions evaluate your financial health, we now discuss how to improve it.
1. Keeping an Eye on Your Income
Bankers will also pay keen attention to your income status despite this not being as instrumental as the other methods. However, steady progress on your income rate will reflect positively on your profile.
2. Conservative Spending
One of the most familiar and straightforward ways of improving your financial situation is by spending wisely. Regardless of how much you earn, you must make ends meet within your limits. Overextending yourself beyond your means can negatively affect your credit score.
3. Budget Allotment
Effective budgeting can identify all your monthly expenses, which can further help you spend wisely. You can create such a budget depending on how much you earn. Remember, a good rule to stick to is the 50/30/20.
4. Making Credit Card Payments on Time
Neglecting your credit card payments negatively impacts your credit profile. Delayed payments also tend to be more expensive, as banks require you to pay interest on the amount due.
5. A Savings Plan is Crucial
One of the most effective methods of improving your financial health is with your savings. The best thing you can do is budget your monthly expenses such that you manage to save at least 20% of your income. This will go a long way in improving your credit profile, while also keeping you financially secure in the future.
6. Make Investments Every Year
If you’ve managed to save a sufficient amount from your savings, but want to increase your financial resources, you could consider investment plans. While it might take a while to understand how they work with respect to fluctuations in the market, they can be a great way to improve your credit score if done right. You can also consider consulting a financial advisor to navigate this process and increase your chances of making a profit.
The Bottom Line
Evaluating your efforts can help you make room for improvements in improving your credit score. And much like you, financial institutions assess their clients’ financial health when deciding whether or not they should give you access to loans or other forms of credit.
Hence, self-imposed rules for financial development can be excellent ways of improving your financial health, bringing you a step closer to a world of financial benefits. Follow the tips mentioned above and keep an eye on your long-term goals when making decisions for a brighter financial future.
The new medical colleges being opened in Uttar Pradesh will be named after saints and sages.
The state government has issued an order naming four district hospitals that are being converted into medical colleges.
These district hospitals are in Bijnor, Fatehpur, Chandauli, and Siddharth Nagar.
The Bijnor medical college has been named after Mahatma Vidur, a philosopher during the Mahabharata era and uncle of the Pandavas and Kauravas.
The Chandauli medical college has been named after Baba Keenaram, said to be the founder of the Aghori sect.
The Siddharth Nagar district hospital will be called Madhav Prasad Tripathi Medical College after the BJP politician from the region. Tripathi, popularly known as Madhav Babu, was also the first Uttar Pradesh BJP chief. He was elected MP from Domariyaganj in 1977, besides being two times Jan Sangh MLA and also a member of the UP legislative council.
The Fatehpur hospital has been named Amar Shaheed Jodha Singh Ataiya Thakur Dariyawn Singh Medical College, after the freedom fighter of 1857.
It is said that he was among the first to use Guerrilla warfare against the British, as taught by freedom fighter Tatya Tope.
Meanwhile, according to official sources, the medical college in Deoria will be named after Maharishi Devraha Baba and the medical college of Ghazipur in the name of Maharishi Vishwamitra.
The medical college of Mirzapur will be in the name of Maa Vindhyavasini, the medical college of Pratapgarh in the name of Dr. Sonelal Patel and the medical college of Etah will be named after Veerangana Avantibai Lodhi. (IANS/JB)
Keywords: Medical Colleges, Uttar Pradesh, Yogi Adityanath, India, Politics
Former Pakistan captain Inzamam-ul-Haq has picked India as the favourite to win the ongoing ICC Men's T20 World Cup in Oman and United Arab Emirates (UAE).
Inzamam feels that the Virat Kohli-led India have a greater chance of winning the trophy as the conditions in the Gulf nations are similar to the subcontinent, which makes India the most dangerous side in the event, according to Inzamam.
"In any tournament, it cannot be said for certain that a particular team will win' It's all about how much chance do they have of winning it. In my opinion, India have a greater chance than any other team of winning this tournament, especially in conditions like these. They have experienced T20 players as well," said Inzamam on his YouTube channel.
He said more than the Indian batters, the bowlers have a lot of experience of playing in the conditions. The Indian Premier League (IPL) was played recently in UAE and most of the Indian bowlers did well in that leg.
Inzy heaped praises on the Men in Blue for the confident manner in which they chased the target against Australia on a challenging track without needing Kohli's batting prowess.
"India played their warm-up fixture against Australia rather comfortably. On subcontinent pitches like these, India are the most dangerous T20 side in the world. Even today, if we see the 155 runs they chased down, they did not even need Virat Kohli to do so," he added.
Though he did not pick any favourite, Inzamam termed the India-Pakistan clash in the Super 12 on October 24 as the 'final before the final' and said the team winning it will go into the remaining matches high on morale,
"The match between India and Pakistan in the Super 12s is the final before the final. No match will be hyped as much as this one. Even in the 2017 Champions Trophy, India and Pakistan started and finished the tournament by facing each other, and both the matches felt like finals. The team winning that match will have their morale boosted and will also have 50 percent of pressure released from them," Inzamam added. (IANS/JB)
Keywords: India, Pakistan, Sports, ICC T20 World Cup, UAE.
Skin problems like itchiness, dryness and flakiness can occur anytime if you're not moisturising your body enough. It is commonly observed that while many people take their skincare routine seriously, a majority of them neglect to moisturise the body. It is important to keep in mind that timing matters a lot when it comes to applying moisturisers. Therefore, knowing the appropriate time to apply body lotion is essential.
Take a look at the ideal times to moisturise your body shared by Kimi Jain, Head of Retail, KIMRICA.
Moisturising the body in the morning sets your skin up to face countless irritants and environmental factors during the day. The skin is constantly exposed to harsh chemicals and pollutants when you're outside which is why using a protective and soothing moisturiser while going out is necessary. Kimirica's Five Elements Body Lotion comes with natural Aloe Vera extracts that act as a rich source of antioxidants and vitamins that helps protect your skin and provide a deep nourishing effect.
Moisturising the body in the morning sets your skin up to face countless irritants and environmental factors during the day. | Photo by The Creative Exchange on Unsplash
After showering, Shaving and Washing hands
After you take a shower, your skin has the maximum moisture and moisturisers work effectively on hydrated skin. That is why dermatologists always recommend applying moisturiser right after getting out of the shower. When applied early, moisturisers are able to trap some water that's still in the body and hydrate the body. Shaving not only helps you to get rid of unwanted body hair but also removes the surface skin cells. To soothe any skin irritation and protect the exposed skin from dryness, apply any hydrating moisturiser that gives your skin a natural glow. The increasing use of antibacterial soaps and hand wash takes a toll on your hand disrupting the natural skin barrier. To protect your hands from cracking and dryness, you can use the brand's Bouquet Hand Lotion that comes with a rich combination of sweet almond oil, Shea butter, grape seed extracts, Olive Oil and Jojoba Oil.
The increasing use of antibacterial soaps and hand wash takes a toll on your hand disrupting the natural skin barrier. | Photo by Nathan Dumlao on Unsplash
During and After Your Flights
Travelling makes your skin dryer, the reason being the low humidity and the recycled air inside. As body lotions are available in small sizes, it is advisable that you should carry your body lotion and apply it during your flight and once you land as this will help in combating the skin drying issue.
Research has shown that the skin effectively repairs itself from 10 p.m. to 11 p.m. That's why you should always make sure to moisturise your skin on or before this time. Also, it has been observed that the skin's trans-epidermal water loss increases during sleep which takes away plenty of moisture from the skin. So, all these reasons make it quite clear as to why you should always moisturise your body before going to sleep.
Research has shown that the skin effectively repairs itself from 10 p.m. to 11 p.m. | Photo by Aily Torres on Unsplash
Exfoliation is an important step in any skincare routine but applying body lotion post exfoliating is equally required. Exfoliating results in the removal of dead skin cells which makes space for a new layer of skin. Applying body lotion will help to soothe the top layer of skin and also strengthen the moisture barrier.
Applying body lotion will help to soothe the top layer of skin and also strengthen the moisture barrier. | Photo by Nati Melnychuk on Unsplash
Workout sessions are often sweaty and tiring but preparing your skin before stepping out is very important as exercising outside often leads to dryness. Applying light-weight body lotion before your session is recommended. (IANS/ MBI)
Keywords: natural, protect, moisturize, dryness, applying, lotion, skincare, hands, body