How do I manage my credit and liquidity needs?

Being financially healthy isn't solely about saving and investing. The other side of the balance sheet includes borrowing money and managing debt. While these may not generate income for you, they can be important and powerful financial tools for your portfolio.

Your Needs
After all the times you've been told that debt is bad, why would we suggest otherwise? It's not that we advocate borrowing a lot of money or accruing large sums of revolving, high-interest debt. But sometimes it's actually a realistic strategy to borrow for your short-term financial needs.

For example, if you need cash for an emergency, or for home improvements or a new car, you shouldn't dip into your long-term investments. Holding onto investments for the long haul is an important cornerstone of our investment philosophy. If you haven't owned your investments long enough for growth opportunities, or the market isn't doing well, the last thing you want to do is pull your money out.

A mortgage is another example of when it makes sense to borrow money. Owning a home is one of life's great dreams and can also be one of the largest purchases you'll ever make. Very rarely do we have the reserves to purchase one outright. While you take on great debt in doing so, the equity you acquire with a home is a great financial tool. There might be a time that you want to use it and apply for a Home Equity loan, which uses the equity you've already built in your home to provide access to cash.

The Balance of Credit & Liquidity
We can't stress enough that, while borrowing can be a smart strategy for the short-term, carrying excessive debt should be avoided. While many of us rely on credit cards to establish good credit rating, for emergencies and other financial needs. We believe the most important thing you can do for yourself is be conscious of balancing your credit and liquidity to remain financially healthy.

Learn More
To learn how Edward Jones can help manage and credit and liquidity needs, contact your local financial adviser. We'll talk to you one-on-one about your financial goals, credit needs and we can provide a complimentary portfolio review to ensure you're looking at the big picture.