Friday, June 1, 2018

Are You Financially Fit?

Many people like to want to measure their accomplishments in relation to accepted standards and guidelines. Want to improve your personal finances?  Start by taking the Rutgers Cooperative Extension Financial Fitness Quiz. Choose the score that best describes the frequency of your performance of 20 financial management practices.

Seventeen of the quiz items have the following five-part responses: always (5), usually (4), sometimes (3), seldom (2), and never (1).  For the remaining three items (e.g., “I have a current will”), respondents are asked to indicate “yes” (5) or “no” (1).   When you’re done, scores for each of the 20 questions are tallied and a summary at the end of the quiz tells how you’re doing. The higher your score, the more often you are doing things that financial experts recommend.

Financial practices included on the quiz include having enough money to pay for emergencies and monthly household expenses, having a written budget and financial goals, calculating net worth annually, having investment diversification and a personal investment account for retirement, and paying credit card bills in full to avoid interest charges.

In addition to providing individualized feedback to people who take the quiz, the data that it generates are used for research. Studies to date have indicated that having a current will and having written financial goals are the least frequently performed financial management practices. Having a bank account and enough money to pay bills had the highest scores.

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