I’ve spent a lot time thinking about my financial situation the past few weeks. Part of that has to do with my newer, bigger tax bill as a result of my recent divorce, as well as the medical bills resulting from breaking my wrist a few weeks ago.
I’m fortunate that I have resources and options to help with these expenses, and I’ve thought about what would have happened if my financial fitness had been different, or if I had a long line of disappointing financial situations.
For Financial Literacy Month, CO-OP Financial Services released a quiz that can help you get a basic idea of where you stand when it comes to financial fitness:
1. I pay my bills on time.
a. Always
b. Sometimes
c. Never
2. I save 10% or more of my income each month.
a. Always
b. Sometimes
c. Never
3. I keep three months net income in a “rainy-day fund.”
a. Always
b. Sometimes
c. Never
4. I plan ahead and save for large expenses.
a. Always
b. Sometimes
c. Never
5. I set and keep financial goals for myself on a regular basis
a. Always
b. Sometimes
c. Never
6. I follow a set budget each month.
a. Always
b. Sometimes
c. Never
7. I shop around and compare prices before making a major purchase.
a. Always
b. Sometimes
c. Never
8. Regularly check my credit report.
a. Always
b. Sometimes
c. Never
9. I examine my checking account statements each month.
a. Always
b. Sometimes
c. Never
10. I look for ways to become more financially aware and educated on a regular basis.
a. Always
b. Sometimes
c. Never
Answering these questions can give you a general idea of where you stand with your finances. You don’t need to use a scoring model to see how you come out, as just thinking about these questions can help you evaluate what you might be doing better.
I know that I can’t answer “always” to every question, but the fact that I don’t answer “never” to any of them allows me to pat myself on the back a little bit.
Improving Your Financial Fitness Over Time
Of course, just because I’m a little complacent about my situation now doesn’t mean that I’ve always had good money habits. There was a time when “never” would probably have dominated my answers. It’s not a point in my life that I want to return to.
Instead, I’m glad I’ve been able to improve my financial fitness over time. Are there things I could do better? Sure. We can all progress, but I am much better off now because I look the time a few years ago to course-correct.
Thinking about these questions can help you take a hard look at the way you manage money today. The exercise also helps you ask how it could be better. All of us can improve, and taking stock is a good way to see if you need to be on a different path altogether, or if you just need to do a little tweaking.
We need to get back to basics every now and then. Don’t get so caught up in the complexities that you forget the simple things that add up to better finances.
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