Back-to-School Quiz! How Are Your Finances Progressing?

With back-to-school season in full swing, I bet you are thinking, “Wow, I don’t miss those days of studying and tests.”  Not so fast!

In honor of Fall, I present to you a quiz on your financial progress over the past year.

Question 1: Over the past 12 months, I have done the following (check all that apply):

1. Rebalanced investments to my original target asset mix.
2. Increased the percentage of pay I am contributing to my work retirement account.
3. Paid off a credit card or other revolving debt.
4. Worked with a professional advisor (i.e., CFP®, CPA, estate attorney, or business succession advisor) to make strategic decisions about my finances.

Scoring:  2 points for every answer checked.

Question 2:  In the past 12 months, I have consolidated financial accounts held at multiple institutions (for example, bank, brokerage, or employer retirement plans).

1. Yes, I significantly consolidated my accounts.
2. Yes, I made some consolidation but still have several relationships.
3. No, I have not consolidated any accounts.
4. Not applicable — I already had most of my accounts with one institution.

Scoring: a = 3 points; b = 2 points; c = 0 points; d =  3 points

Question 3:  In the past year, my emergency fund has:

1. Stayed at my target of 3–6 months’ worth of expenses plus anticipated big purchases (for example, vacation or car expenses) in a savings or money market account.
2. Grown larger than needed because I do not know what to do with excess cash. c. Dipped below the target amount because of unexpected expenses, and I have no clear plan to build it back up.
3. I do not even know what a good amount is to have in emergency savings.
4. I have invested all cash in the stock market because I want higher returns.

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

Question 4: In the past 12 months, I have made the following progress on my long-term savings goals:

1. Calculated annual savings targets for the big goals (for example, retirement, college, housing, emergency fund) and consistently funded those goals.
2. Calculated annual savings targets for the big goals, and funded the goals 50% or more of the time.
3. Calculated annual savings targets for the big goals, but rarely saved the money.
4. What do you mean by annual savings goals?

Scoring: a = 4 points, b = 3 points.=, c = 2 points, d = 0 points.

Question 5: In the past 12 months or earlier, I have done the following to organize my finances (check all that apply):

1. Transferred one or more old retirement plans into a Rollover IRA or my current employer’s plan.
2. Created a secure document or used password-aggregator software to put my account logins in one easy spot for a family member or executor to use if I become incapacitated.
3. Informed my estate executor, life partner, adult children, or a trusted friend of the exact location of my important financial documents (wills, trusts, insurance policies, financial statements).
4. Consolidated my banking to one institution.

Scoring: 1 point for each checked answer.

Question 6:  “In the past year, I have met or spoken with the following advisors (check all that apply):”

1. Accountant, CPA, or tax preparer.
2. Financial advisor.
3. Property and casualty insurance agent/broker.
4. Estate planning attorney (or N/A if my estate plan is less than 5 years old).

Scoring:  2 points for each checked answer.

How did you do? 

• 18 points or higher:  Winning the Race
• 10-17 points:  Steady Rate
• 9 or less points:  Snail’s Pace

Notice, none of the questions asked about day-trading, beating the market, or how many hours you spent watching Bloomberg. Financial progress happens through your actions, consistent saving, and occasionally checking in with your advisors.

Hopefully this exercise gave you a few solid ideas of moves you can take to get closer to your financial goals.