I’m a sucker for new tests, and Laurie over at Well Kept Wallet just put out a fun one to determine how financially stable we are. There’s 20 questions to it, but most of them you should be able to answer in 2-3 seconds. The ones that take longer you can save for later to extend the joy ;)
Here are the 20 questions below, along with my answers next to them. I’m going to guess I’ll do fairly well considering all I do is think and write about money, but if not I give you full permission to call me out :) And then I’ll retire this blog shortly thereafter.
Time for the fun! Let us know how you score afterwards…
The Financial Stability Test:
(The more you say “yes” the better)
- You’re at peace with your money situation. Yes. I’m always scheming to make it better, but deep down I’m truly content.
- You don’t fight about money with your spouse. True. Thankfully I married someone frugal! (Now if only I could get her in that mobile home…)
- You don’t use your credit cards often, or if you do, you pay them in full every month. True. I use our USAA card for everything to get the cash back, but we pay it off in full every month.
- You’ve got a fully stocked emergency fund. Not any more :( We’re very thankful to have $20k stashed which would last us about months, but just two years ago we were hovering around $80,000 which would give us a year+ of safety. Thankfully we’re back on top now and re-filling ‘er up, but just shows how fast life and business can change! Gotta squirrel away those nuts when you’re able to!
- A job loss wouldn’t mean you couldn’t pay your bills. We’re okay there. If the internet exploded and I lost my blogs, we’d be able to last for a little while until I found a different way to hustle. We’re already used to living on one income anyways, so it kinda feels like we’ve had a job loss for 5+ years anyways :)
- Financial emergencies don’t invoke panic. Truth. This is the biggest benefit to having your money down. You still get super pissed off when something stupid happens and sucks up money, but the feeling doesn’t last nearly as long as when you’re living paycheck to paycheck. One crazy event can wipe you out in a heart beat, so always good to be one step ahead for whenever that happens… Cuz something *always* does :(
- You’re okay with spending money on special occasions. Absolutely. Hoarding money can get old (and bad for you) fast, so you have to be able to let loose here and there and live it up a little. Nothing wrong with splurging when it’s budgeted for (build in a “splurge” category! Then you’ll really love budgeting! haha..), you just can’t get all hardcore and get yourself in trouble.
- The thought of being generous with your cash sounds exciting and not panic-inducing. Yes. And although I suck at giving back at times, any time I do it’s not even a second thought as to whether “I can afford it” or not. If anything, I always feel like I need to be giving away more than I do – something I’m currently working on.
- You’re happy about your financial situation. Yup! Hard to complain, even though I do at times ‘cuz I’m a human!
- Saving money has become a habit. Oh yeah. You don’t even think about it once it’s habit. And when you rock services like Digit or Acorns you don’t have to *do anything* either!
- Others’ opinions about what you have/don’t have don’t concern you. True. I’m hard enough on myself – I don’t need others to be chiming in! (Unless they’re there to help me.)
- Paying the bills never requires an in-depth plan. True. I automate half of them, and the other half I pay manually once a month at the beginning of every month. It’s all done and forgotten about within 30 mins.
- Retirement and/or kids’ college expenses are covered by a solid, working plan. False to Kids’ college. I contribute when I can, but I’d be lying if I had a plan in place. Lately all the money we’ve put in their 529s has come from gifts. As for retirement – Always working on that! :)
- Your debt-to-income ratio is below 30%. Yup! In 2013 it was 19% (then it took a dive in 2014), and now we’re back to 20% in 2015. To calculate this, divide your total monthly debts by your total gross monthly income. For us right now it’s about $10,000/mo income and $2,000 debt (mortgages). So 2,000/10,000 = 20%
- You’re thoughtful about purchases. Yes. A little *too* thoughtful at times.
- Avoiding/eliminating debt is a priority for you. Not really. But only because our debt consists of only mortgages and not consumer debt like credit cards (or else I’d be crushing those as fast as I can!). There was a time I really wanted to pay off our house and took on a crazy aggressive strategy, but right now what excites us most is figuring out our ideal lifestyle while still growing our wealth. And investing our $$ right now does that better.
- You budget. Or else you’re so good at spending wisely that you don’t need to budget. A little bit of both. I used to budget religiously, but now I pretty much just look over the #’s every now and then to make sure we’re all good. No more tracking every penny and getting hardcore about it like we used to (which is def. recommended if you’re just starting out). The foundation has long been set and now we enjoy the confidence budgeting gave us!
- You have a plan for the unexpected. No. Unless the plan is “tapping our emergency fund?” Or “having insurance?” I suck at planning for the expected, no less the unexpected, so I admire all those who can plan ahead like that :) All I try to do is earn as much as I can – and then save as much as I can – so hopefully I’m covered in the future.
- You buy appreciating as opposed to depreciating assets. Nowadays, yeah. Even my hobby – coin collecting – is all about appreciating assets! Haha… Though that wasn’t planned. We still have cars though that are always depreciating. No way around that unless we ditch them.
- Large purchases don’t create a damaging ding in your finances. Truth. Though the largest things we “purchase” are items like insurance and grocery bills. We rarely splurge on stuff that costs a lot of money just ‘cuz we’re content with other less-expensive items.
Let’s see, what did we get here…. 16 out of 20 – woo! Not perfect, but who is? (Watch – some of you will score a perfect 20 ;)).
Here’s the key below to see where you rank. It’s skewed more positively because Laurie is super sweet and positive herself, so if you need a better kick in the ass just share your answer with Mr. Money Mustache and see what he thinks ;) He’ll set you straight!
- 16-20: You’re kicking it!
- 11-15: You’re doing very well!
- 6-10: You’re off to a good start!
- 0-5: You’ve got room to grow.
Brave enough to share with us? Drop your score in the comments below and let’s see how many of y’all I’m “Kickin’ it with”… And as always, this is more for fun and learning about ourselves than any real competition. The only person who will ever care about your score (and money) is you! So if you’re not happy with the results, it’s time to take some action and change that.
PS: Check out Laurie’s original post for more details on each of these 20 questions. She elaborates a lot more on them and might help you answer them better.
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!