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(ARA) - Doctors consistently recommend annual exams for early detection of health problems. So why not an annual exam for your personal finances? When's the last time you had a check-up to see if your bank account has the physique of an Olympic athlete or the shape of a slouching couch potato?
As doctors say, "What you don't know could harm you." And in the case of personal finances, the same could hold true, says Randy Schuldt, vice president at IHateFinancialPlanning.com, a Web site for the more than 75 percent of Americans who hate financial planning.
Just as millions of Americans avoid exercising, a nationwide survey conducted by NFO Research, Inc. indicates that more than 70 percent of Americans don't use a financial plan to keep their personal finances in tip-top shape.
"It's vitally important to have a financial plan in place. A blow to your finances, such as losing your job, is akin to being hit with a major illness," Schuldt notes. "The healthier you are, the more quickly you will recover."
To help get a quick idea about the state of your personal finances, IHateFinancialPlanning.com has developed the following quiz. Take just 10 minutes to answer the following questions, add up your score, and you'll get a snapshot about how healthy your finances really are.
"It's kind of like getting a reading on your cholesterol," Schuldt says. "In just 10 minutes you'll know if you're doing okay or if you should see a financial professional, who can trim the fat from your financial diet and get your finances back in shape."
IHateFinancialPlanning.com Financial Fitness Calculator
1. Are you 30 or older? (Yes/No)
2. Do you have at least $3,000 or three months of living expenses saved to cover emergencies? (Yes/No)
3. Are you participating in your company's 401(k) or pension program? (Yes/No)
4. Do you save or invest beyond your retirement plan and emergency fund? (Yes/No)
5. Do you know how much you need to save each month to retire at the age you would like? (Yes/No)
6. Do you have life insurance (at least enough to cover funeral expenses)? (Yes/No)
7. Do you have adequate car insurance coverage? (Yes/No)
8. Do you have health insurance? (Yes/No)
9. Do you have insurance that covers disability (besides Social Security)? (Yes/No)
10. Do you have a will? (Yes/No)
11 Do you spend less than 25 percent of your income on your rent or mortgage? (Yes/No)
12. Are you investing or saving money with each paycheck in a savings account, money market account or mutual fund? (Yes/No)
13. Are you paying your credit cards in full each month? (Yes/No)
14. Are you paying all of your bills in full each month? (Yes/No)
15. Do you know the interest rates on your checking, savings and credit card accounts? (Yes/No)
16. Have you reviewed your credit report lately? (Yes/No)
17. Do you balance your checkbook each month? (Yes/No)
18. Do you track your monthly expenses? (Yes/No)
19. Do you regularly read about improving your personal finances? (Yes/No)
20. Do you have a financial plan? (Yes/No)
21. Are you saving at least 10 percent of your gross income each month? (Yes/No)
Scoring:
Give yourself five points for each "yes" answer, zero points for each "no" answer.
0 to 40 points: Financially Flabby
You're seriously at risk for a variety of money-related maladies. Just one financial setback, such as a job loss or accident, could wipe out your chances for long-term economic recovery. The best treatment: run, don't walk, to a financial professional and get started on a financial fitness recovery plan. If the mere thought of running to a financial professional leaves you winded, check out IHateFinancialPlanning.com for some easy-to-follow tips and planning options designed for people like you, whose finances are out of shape. And take heart -- when you plan on the Internet, nobody sees you in your running shorts.
45 to 75 points: E for Effort
You're definitely on the right track financially. You're developing some economic muscle power, having put some of the key financial planning elements in place. Now is not the time to rest on your laurels, however. Keep working out the details of your personal financial plan: the finish line is visible if you just keep plugging.
80 to 100 points: In Great Shape
Three cheers for you! Your hard work has paid off, and your personal financial plan has all the potential to keep you in great economic shape. But don't put your plans in a drawer and forget about them. Be sure to update your plan frequently, as your life's needs dictate. After all that work, you don't want to lose that great financial physique.
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