Evaluate What You Know About Your Finances

    Man holding a bank card
    Photo by rupixen on Unsplash
    Taking stock of your existing finances is the first building block to sound financial decisions. Examine what you know about your finances – and what you don’t know.

    After all, before you can start planning how to get more out of your money and how to invest it wisely, you need to know exactly how much you’ve got, where it’s currently parked, and just how accessible it is. You also need to understand the kind of financial commitments you’ve made.

    To aid you in this task, we have created a simple assessment that you can take. Be honest with yourself. The goal is not to get a high score but to discover how accurately you understand your current financial situation.

    1.I know my current net worth (i.e., the value of assets I have minus the liabilities I have).
    2.My financial reality allows me to achieve the lifestyle I want.
    3.I review my monthly expenses and the nature of my regular expenses and obligations and I’m comfortable with them.
    4.I know how much insurance I carry and what the benefits are, how much cash value there is in my policies (if any), and what rate the money is earning (if applicable).
    5.I have reviewed my insurance policies sometime in the last 6 to 12 months and I am comfortable that I’m paying at a competitive rate in today’s insurance market.
    6.I know the current value of my home, the size of the mortgage and the interest on the mortgage, and how much equity I have in my home. OR I know how much rent I pay and how much of a security deposit I gave the landlord and what repairs or renewal right I have.
    7.I know the nature and size of all my investments (including cash, savings accounts, treasury bills, bonds, real estate investment, etc.). I also know where all the paperwork is kept.
    8.I know the annualized returns of all the aforementioned investments.
    9.I know the current value of all my retirement savings or accounts.
    10.I know what percentage of income I’m saving.
    11.I know how much I’m putting into my respective retirement savings, whether that amounts to the maximum allowable contribution, and what my vesting schedule is.
    12.I know how much money I will be getting when I retire and what my pension benefits (if any) will be.
    13.I know whether or not I have a will and what it’s provisions are, and how up-to-date it is.
    14.I have a long-term financial goal and I am confident that I could reach my goals in the time frame that I have set.
    15.I use tools to plan financially, such as, budgeting tools and financial planning tools.
    16.I know how my parents handled their finances and I know what effect that has had on me and how I manage my money.
    17.I know the type of insurance I have on my assets and what the deductibles are. I know whether or not my policy will provide me with ‘today’s replacement cost’ or actual cash value, if my assets were destroyed.
    18.I have named proper beneficiaries of my insurance and retirement accounts.