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Take the financial fitness test

23rd February 2008, 05:07 am

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How do you feel overall about your personal finances?  Are you in shape to hike up Mt Retirement? Could you survive in the financial wilderness if you had a setback such as a job loss?  I have created a financial fitness survey to help you assess different areas of your personal finance.  Please take a minute and complete the financial fitness survey on the next page.  The purpose of this survey helps you identify areas both where you are doing well and areas of improvement for your personal finance life. This survey should take less than 5 minutes to complete.

A complimentary PDF version of this test post at book resources 

  1 = Noor Poor     2     3 = Fair or sometimes     4    5 = Yesor excellent
1.  Honest with myself about problems and opportunities with respect to my personal finances.  Open and honest communication with my spouse (if applicable)   1  2  3  4  5
2.  Have written short and long term personal financegoals.  Regularly identify the next action step for eachgoal.  Celebrate completion of goals.   1  2  3  4  5
3.  Organization system for financial paperwork and incoming bills.   1  2  3  4  5
4.  Consult with trusted friends to help you achievesuccess and avoid poor financial decisions.  Only purchase investments that you understand and areappropriate for you.  Focus on building wealth slowlyversus getting rich quick.  1  2  3  4  5
5.  Verify all transactions for errors.  1  2  3  4  5
6.  Maintain a balanced checkbook.  1  2  3  4  5
7.  Live within your means.  Know how much it takes tolive each month (living expense).  Spend less thanyou make every month.  1  2  3  4  5
8.  Set monthly budget for variable spending categoriessuch as food and entertainment.  1  2  3  4  5
9.  Regulary review fixed spending to evaluate reducinghousehold expenses.  1  2  3  4  5
10.  Have an established process to prevent impulsepurchases (sleep on it, 30 day waiting period, etc)  1  2  3  4  5
11.  Research large purchases to insure best value andconfidence in the decision.   1  2  3  4  5
12.  Set aside money regulary for annual expenses such as insurance, vacation, and Christmas.  1  2  3  4  5
13.  Save up for large purchases instead of using credit(autos, furniture, etc)  1  2  3  4  5
14.  Have an emergency fund equal to one month of living expense.   1  2  3 4   5
15.  Have eliminated or plan to eliminate consumerdebt. 1  2  3  4  5
16.  Maintain 3 to 6 months of living expense in a rainyday fund.  Invest the rainy day fund in a secureinvestment such as a money market or certificates ofdeposits (CDs)  1  2  3  4  5
17.  Know how much I need to save for a secure retirement.  1  2  3  4  5
18.  Save enough each month to achieve a secureretirement for your target retirement date.  1  2  3  4  5
19.  Review and adjust investment portfolios annually toachieve desire asset allocation and diversification.  1  2  3  4  5
20.  Evaluate and minimize investment expenses.  For example employ index funds to achieve market performance.  1  2  3  4  5
21.  Have proper levels of insurance (life, medical, etc)  1  2  3  4  5
22.  Review insurance policies for both value andcompetitiveness.  Increase insurance deductables tothe highest level that you can afford.  1  2  3  4  5
23.  Save appropriately for your children’s college education.  1  2  3  4  5
24.  Have a will to direct your wishes regarding your children and assets.   1  2  3  4  5
25.  Purposely give in alignment to your values.  1  2  3  4  5

How did you do on the survey? The purpose of the survey is to show you areas where you’re doing well and areas where you can improve. If you got good scores (4 or 5) on most of the questions then you are in good shape - congratulations!  If you got low scores (1, 2 or 3) on the majority of the questions, don’t feel despair. Through focus and continuous improvement you will become financially fit. As you become more financially fit, you will experience less stress and be able to pursue your passions and live your purpose.

Follow your dreams, Achieve your goals!

Category: Debt, Goals, Investing, Retirement, live within your means, personal finance  |  Comment (RSS)  |  Trackback
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