I am sharing to you some ways to determine your financial fitness and status. At least by answering the ten simple questions you will know how financially fit you are and how you can support your chosen lifestyle. Answer them by a Yes or a No. Each Yes answer is equivalent to 10 points and each No answer is zero point, but answer them honestly.
- Do you have a personal plan with specific financial goals based on a specific timetable? It can be one year, two years, five years and soon. (Yes) or (No).
- Is your monthly debt payment for consumption purchases or your credit card payments every month less than or just about 20 or 30 percent of your monthly income? (Yes) or (No).
- Have you attended any seminar or read any book on improving your knowledge of personal finance? (Yes) or (No).
- Do you budget your spending and monitor your monthly expenses? (Yes) or (No).
- Do you know how much you are worth today? And do you have your own statement of assets and liabilities? (Yes) or (No).
- Are you saving or investing money regularly from your active income or salary? (Yes) or (No).
- Do you have any long-term savings plan such as a pension or educational plan or any endowment plan? (Yes) or (No).
- Do you have any form of medical insurance? (Yes) or (No).
- Do you have any form of insurance such as accident, disability or life insurance? (Yes) or (No).
- Do you have enough savings to last you six to twelve months if, for some reason such as illness or a job dismissal – you have to stop working today? (Yes) or (No).
This exercise will wake you up to the urgent need to make a financial plan so that you are prepared for your future. And let you realize your financial status whether or not you have been paying attention to the way you handle your money. This is also good for those who have started building their wealth and who might want to speed up the saving process after answering the questions. And if the test shows you are not financially fit – then it is never too late for you to act now. And if you are financially fit – this will help you further improve your financial plan.
To find out how you scored, the below
- If your scores are from Zero to Forty points – you are financially unhealthy. You will face serious danger the moment you lose your source of income. What you have to do is to review your expenses especially your debt payments. You would have to stop all unnecessary expenses immediately.
- If your scores are from Fifty to Seventy points – you are in good position to be financially healthy. But still you would need to improve your financial plan such as determine your personal net worth you want to have when you retire, you should break down this target every five or ten years by choosing the lifestyle you want to maintain. This will help you fix your financial goal every five or ten years.
- If your scores are from Eighty to One Hundred points – you are on your way to financial independence. You have the commitment and the discipline to achieve your financial well-being. Just keep it up and do not fail to exert efforts to learn new things about how to further achieve your financial goals. Congratulations!
Read also my other column Terms That We Always Ignored
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My favorite Saying: “Dream big and don’t stop without giving it a chance to come true.” I am a father of 3 for 25 years +, OFW for 17 years , a Blogger, sometimes a Poet, Self-motivated and Professional by experience. You can call me Paul or Pruel. I am friendly animal but can kick you off when it is needed. LOL. I have no specific areas where my writing will focus on. I write any subject that interests me under the merciless sun.