Take this financial checkup, and in ten easy questions, you will know which essential aspects of your financial plan are healthy and what needs attention. Your score will also give you clues about the level of risk in your investment strategy that’s healthy for you.
Circle the answer that best fits your situation and tally up the total at the end. Ready, set, go!
- 10 Points: I know my goals, and their estimated cost and timeline.
- 5 Points: I have goals, but don’t know the details yet.
- 1 Point: The future looks really fuzzy and it’s too hard to set goals.
- 10 Points: My income, from sources like my job, investments, pension, Social Security etc. is reliable and grows each year, and is more than enough to pay the bills.
- 5 Points: My income is enough to pay the bills, but I’m worried that my income may not be enough in the future.
- 1 Point: There’s barely enough to pay the bills.
- 10 Points: My job is secure, and my skills are in high demand.
- 5 Points: My job is pretty secure, but it could be difficult to find another job at the same pay.
- 1 Point: I need new skills to find a decent job in today’s economy.
- 10 Points: I have cash savings equal to at least half of my annual income or expenses.
- 5 Points: I have cash savings equal to less than half of my annual income or expenses.
- 1 Point: Cash in the bank? I wish.
- 10 Points: I’m saving 10% or more of my annual income.
- 5 Points: I’m saving 1 – 9% of my annual income.
- 1 Point: Saving? No can do.
- 10 Points: I pay all my debts on time and in full. (Or, I have no debt at all.)
- 5 Points: I can afford the monthly minimum payments on my debts, and sometimes a little more.
- 1 Point: I don’t know how I’m going to repay my debts.
- 10 Points: My FICO score is good enough to get the credit I need without paying a premium.
- 5 Points: My FICO score isn’t as good as I want it to be, but I’m working on a plan to improve it.
- 1 Point: My FICO score makes it difficult for me to buy a home, buy or lease a car, rent an apartment, or get a cell phone.
- 10 Points: I have health insurance and use it.
- 5 Points: I have health insurance but hesitate to use it because it costs too much to get medical care.
- 1 Point: I don’t have health insurance right now.
- 10 Points: People (like a spouse and children) depend on me financially, and I have life insurance equal to at least four times my income. Or, no one is financially dependent on me, and I have life insurance equal to at least one year’s income.
- 5 Points: People depend on me financially, and I have life insurance equal to at least 2 times my income.
- 1 Point: People are dependent on me financially, and I have insurance equal to less than 2 times my income.
- 10 Points: My will, durable power of attorney, and healthcare power of attorney are up to date.
- 5 Points: I have an up to date will, but not a durable or healthcare power of attorney.
- 1 Point: I just haven’t gotten around to updating or completing my estate plan.
My Total Score: _____________
Your Financial Health Assessment:
|Score||What This Means for My Financial Health & Investment Strategy|
|85 – 100||Congratulations! Keep up your healthy financial habits and decisions to maintain your financial strength. With a healthy financial base, you have strength and resiliency to cope with the ups and downs of the investment markets. You can consider having some, but not all, of your investments in risky assets, like stocks and stock mutual funds.|
|50 – 84||Good start! You’ve made some progress towards financial health, but don’t stop here. With expert help or on your own, address one essential area at a time, and work on making it stronger. Until you improve your overall financial health, play it safe with your investments, with little to no risky assets, so that you don’t put the savings you do have at risk of loss.|
|Under 50||Get help now, and avoid the stock market completely. It’s never too late to improve your financial health. It’s not easy to make changes in your financial situation, habits, or mindset, but it is possible to take one step at a time to create a new financial future. Do it for yourself, and for the people you love.|
Plan Well. Live Well.
Karin Maloney Stifler, CFP®, AIF®
True Wealth Advisors