Personal Finance #102 - Take a financial quiz

I've posted this quiz before, but if you have not seen it, then take a 15 minute Financial Health Quiz. For each question, pick the choice closest to your current financial situation. Add up your score, and you can analyze your financial health at the end. If the question does not absolutely apply to your own situation, give yourself 3 points. Tell us how you did...

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1. I need at least $3,000 for travel money for my parent/child who has a medical emergency, where will I get the money?

a. I already have more than enough saved up in my emergency fund
b. I will use combination of personal funds and credit card
c. I have no emergency fund. I'll use my credit card, and pay it later
d. I have no emergency fund. I'll borrow from my relatives, and pay it later

2. My family wants to purchase a big screen TV or vacation trip costing at least $2,000 or more. How will I pay for it?

a. I have been saving up to pay 100% toward the purchase without having to touch my emergency fund
b. I will pay down more than 50% and charge the balance on my credit card
c. I have no saving whatsoever. I'll use my credit card, and pay it later
d. I have no saving whatsoever. I'll use the no-pmt for one year deal, and hope to pay for it in a year

3. Our debt situation (credit card, student loan, home equity, auto, 401(k), consumer loans, etc.) is as follows:

a. Including the mortgage loan, we are completely debt-free
b. Excluding the mortgage loan, we have no other debt
c. Excluding the mortgage loan, we have more than 10% of our annual gross income in debt
d. Excluding the mortgage loan, we have more than 20% of our annual gross income in debt

4. Our attitude/behavior toward credit score is:

a. We have good FICO scores, and I don't ever expect to borrow money
b. We have good FICO scores, and surviving financially
c. We have low FICO scores, and are trying very hard to raise our FICO score by cutting back on spending
d. One of us has a low FICO score which is going down because of our overspending habits

5. If my spouse or I became disabled tomorrow, how do I rate our family financial situation?

a. We have no debts and have good disability insurance. We will not skip a beat
b. We have some debts and disability insurance. We will suffer some financial setback
c. We have some debts and no disability insurance. We will experience major financial setback
d. We borrow against the 401(k), home equity, or move in with the relatives

6. If my spouse or I died tomorrow, how do we rate our family financial situation? - If you are single with no dependent, give yourself 3 points.

a. No debts and have term-life insurance of 8 to 10 times the gross income. My family can live comfortably
b. We have some debts and small group life insurance. My family will have to work longer and retire later
c. We have large debts, no emergency fund, and no life insurance. My family may have to sell everything
d. Bankruptcy is the only way out for my family

7. Our (my) annual income tax refund situation:

a. We(I) usually have a small tax refund or pay a small amount (under $500)
b. We(I) usually pay more than $1,000 in tax payment each year
c. We(I) usually receive between $500 and $1,999 in tax refund
d. We(I) usually receive more than $2,000 in tax refund

8. If I have a child(ren) under 14, will I have enough college fund saved up for them before college starts? (If you have no dependent child, add 3 points to your total score)

a. We have enough Coverdell, UGMA, UTMA, or 529 funds saved up for 4 yrs of college for each child [UGMA/UTMA = Uniform Gift/Transfer to Minors Act]
b. We have enough money set aside for 2 years of college by the time a child is 18. Cash flow the rest
c. We have money, but since I worked through college, my kids will do the same
d. We have nothing saved for college. I'll rely totally on student loans.

9. Our(My) home ownership and mortgage situation are:

a. We(I) own a house and have no mortgage
b. We(I) live in an apartment, or I own a house and have a 15 year (or less) fixed rate mortgage
c. We(I) own a house and have a 30 year fixed rate mortgage
d. We(I) own a house and have an adjustable rate or interest only mortgage

10. Retirement Fund (RF) = Age2 x family annual gross income/100, where Age2 = (Your age - 20) x (Your age - 20), so if you are 30 yrs old, Age2=100

a. We(I) have a great pension or have more than 100% of RF saved up
b. We(I) have small pension, and have more than 60% of RF saved up
c. We(I) have no pension, but have more than 30% of RF saved up
d. We(I) have many debts. I need Social Security early and expect to move in with my child(ren) when we retire

11. Current funding for retirement fund

a. We(I) are saving the maximum amount allowed by IRS for retirement fund
b. We(I) are saving at least 10% of family annual gross income into a retirement fund
c. We(I) are saving at least 6% of family annual gross income into a retirement fund
d. We(I) are not saving any money into a retirement fund. We(I) can't save because we(I) have no spare funds.

12. Our(My) next car purchase plan is:

a. Our(my) cars are paid for, and we(I) plan to finance the next vehicle purchase with at least 20% down pmt
b. We(I) have one small auto loan, and we(I) plan to finance 100% of the next vehicle price
c. We(I) are upside down on a car loan, and we(I) plan to finance the next vehicle purchase
d. We(I) are upside down on multiple car loans, and car payments are a way of life
e. Our(my) cars are paid for, and we(I) will pay cash for reliable economical used vehicles without touching our emergency fund

13. Estate Planning - will, durable power of attorney, will data form (collection of important financial data) situation:

a. Each of us (I) has a will, durable power of attorney, living will, life insurance, and will data form
b. Each of us (I) has a will and have life insurance at least 5 times the gross income
c. Neither of us (I) has any of these documents and has life insurance at least 5 times the gross income
d. Neither of us (I) has any of these documents and has small or no life insurance

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Score: a = 3 points, b = 2 points, c = 1 point, d = 0 point, e = 4 points

Add up your score and see where you are on the personal finance scale

Analyze your family financial situation

34 - 40 points - We're doing smart things with our money, and on our way to a comfortable retirement
27 - 33 points - We're in good shape, but we can use few suggestions to improve my family finances
19 - 26 points - We have some trouble spots that need attention. Get on the ball, and fix them soon
10 - 18 points - We're sinking fast. Fix our problems immediately, or get help now
Less than 9 points- Emergency attention required! - we have multiple bleeding. My family future and retirement will suffer without immediate change in our lifestyle and amputation of debts.

Everyone is at a different stage in his/her financial life. Some are young and have not saved up any emergency fund, and some are mature individuals with no debts and are ready to retire. No matter where you are, you should be aiming for a better score each year.

The best indicator of your financial health is the Net Worth (= Assets - Liabilities), or the difference of all the value of that you own and all of your debts including mortgage. If your Net Worth is increasing each year, you are moving in the right direction. But understand that the day you purchase a new car or a new house, you will see a significant drop in your Net Worth (because of the initial sales tax and a big depreciation as you drive the vehicle off the lot).

Tell us how you did on this quiz.

Suggestion: Take this quiz once a year, and see how you've improved on your financial health.