Investing For Your Future
Monthly IFYF Investment Message
June 2004
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You can tell a lot about a person's financial fitness by what they know and do. Below are 35 questions that can be answered in one of three ways: yes, no, or unsure. Answer each question and give yourself one point for each "yes" answer. The higher your score, the better your financial fitness.
- ______I write (bank or credit union or brokerage firm) checks to pay bills.
- ______I reconcile my monthly checking account statement each month.
- ______I read at least one personal finance book or magazine per month.
- ______I pay my bills when they are due.
- ______I have credit accounts in my name.
- ______My credit card(s) is/are at a competitive interest rate.
- ______I have a list of all my credit card numbers and contact numbers in case they are lost or stolen.
- ______I check my credit card statements against my receipts on a monthly basis.
- ______I pay the entire balance due on my credit card bill each month.
- ______I obtain a copy of my credit report annually to check its accuracy.
- ______I have a good credit rating (no negative remarks and a credit score of 700 or above).
- ______I know how much money I spend each month to live and can account for my spending.
- ______I have a monthly spending plan/budget.
- ______I have a savings account in my own name.
- ______I plan ahead for large expenses such as insurance premiums, holiday shopping, and appliance replacement.
- ______My monthly credit card payments are less than 20 percent of my take-home pay.
- ______I save a minimum of 5 percent of my income (10 percent is even better!).
- ______My home and valuables are adequately insured.
- ______I have a written, photographic, and/or video-taped record of my household goods.
- ______I have an emergency fund of six months of income easily available in a savings account, money market fund, or CD.
- ______I know what Social Security or other benefits will be available to me at retirement.
- ______I can locate my family records: marriage, birth, divorce, and death.
- ______I can locate the certificates and records of my stocks and bonds.
- ______I know where my safe deposit box is located and where the key is kept.
- ______I have a list of the important papers that I keep in my safe deposit box and know where this list is located.
- ______I can locate my insurance policies: disability, life, health, property, and automobile.
- ______I know the kinds and amounts of disability, life, health, and auto insurance protection I have and am comfortable with my coverage.
- ______I know the names of the beneficiaries and contingent beneficiaries of my life insurance policies and retirement savings plans.
- ______I know the name and address of my insurance agent(s) and financial advisor(s).
- ______I have a savings and investment plan for retirement (e.g., 401(k) plan).
- ______I have an up-to-date will and can locate it, along with the name and address of my attorney.
- ______I have a living will that indicates my health care treatment preferences.
- ______I can locate copies of the last three years' income tax returns.
- ______I can prepare state and federal returns for myself.
- ______I know my net worth (assets minus debts).
If you score over 30, you are doing extremely well and, between 24 and 29, very well. Scores between 18 and 23 indicate a need to take some action to improve your finances. A score of 17 or less means that your financial health is poor, but can be improved by taking action on those items where you indicated a "no" answer.