With the New Year upon us, millions of Americans are making resolutions to improve both their waste line and their bottom line. If you’re looking to improve your financial fitness this year, it’s important to first understand how you’re already doing. The following quiz, taken from my Money for Life Success Planner, will help you understand how you’re doing financially, and where you can improve.
- What percentage of your income do you save each month?
- 10 percent or more
- Less than 10 percent
- How often do you use a monthly budget to track and plan your spending?
- Almost always
- When you make a purchase using a credit card, how quickly do you usually pay off the entire balance?
- Immediately or before the end of the month
- Between one and three months
- I usually carry a balance from month to month
- How many times during the last six months have you paid a bill late?
- One to five
- Six or more
- Most of your major purchases are…
- …planned in advance, with money set aside to cover them
- …planned even though the funds aren’t always there to pay for them
- …unplanned or spontaneous
- If you needed to come up with money quickly to pay for a major home repair or an emergency, what source would you use?
- Funds already on hand
- Funds from available credit
- No funds available without establishing credit
- If you lost your job or main source of income, how long could you provide for your basic needs and meet your financial obligations?
- Three or more months
- One to two months
- Less than one month
- The insurance I have to cover the loss of major assets including real estate, autos and personal property is…
- …enough to cover replacement costs
- …less than enough to cover replacement costs
- …unsure or don’t have coverage
- When was the last time you reviewed and adjusted your retirement plan?
- Within the last year
- In the last five years
- I don’t have any savings for retirement
- When you think about your ability to meet future financial obligations, you feel…
- …completely at ease
- …moderately concerned
- …very concerned
Give yourself five (5) points for each time you answered “1,” three (3) points for each “2,” and one (1) point for each “3,” then total your score. If you scored between 40 and 50, you’re in great financial shape. If you scored between 20 and 39, you are off to a good start, but could still address some weaker areas. If you scored below 20, you need to rethink your financial plan, and make some big changes.
Regardless of how you scored, now is a great time to sit down and examine your financial situation. Write down your financial goals, and develop a plan of how to accomplish each one.
Steven B. Smith is the author of Money for Life: Successful Money Management and Financial Fitness in Just 12 Weeks! and the Money for Life Success Planner and creator of the Mvelopes Money Management system.
[photo courtesy of flickr / CC BY-SA 2.0]