Financial fitness quiz

When it comes to physical fitness, exercising and eating healthily are two no-nonsense ways to work toward your goals. But the road to financial fitness can feel a little more complex.

When you feel financially fit, you feel secure. It’s about more than how much money you have in the bank – it’s knowing what your goals are and having a clear path to meet them. It’s having plans in place that can help to protect you and your family. And it’s being able to use your resources to create the life you want.

Assess your current financial fitness with this short true-or-false quiz. The answers can help you build a stronger foundation for your future.     

How financially fit are you?

True or false?

1. I have a financial plan in place that prioritizes my short-term and long-term goals and outlines ways to achieve them. T/F
2. I know how to use debt and savings to work toward my financial goals. T/F
3. I have 3-6 months’ salary saved in an emergency fund. T/F
4. I max out my retirement account contributions each year. T/F
5. I have investments outside of a retirement account. T/F
6. I know how to use my investments to lower my taxes. T/F
7. My investments are based on my risk tolerance and time horizon. T/F
8. I have a plan in place to protect myself and my loved ones if I die, become disabled or unable to care for myself. T/F
9. I feel able to support nonprofits and charities I’m passionate about. T/F
10. I have estate planning documents set up, such as a will or trust, healthcare and financial power of attorney or an advanced directive. T/F
11. I work with a trusted financial advisor. T/F

How did you answer?

Give yourself a point for every “true” statement. Total up your score and see below.

0-3: Starting out

You might not be doing much financial planning right now, but the good news is you can start flexing your financial muscles at any time.

Focus on a specific goal to start out with, like paying down debt or building up your savings. Planning can seem overwhelming, but a financial professional can help you prioritize the most important next steps.

• Write down your short and long-term goals. Get clear about what you want to accomplish in the next five years, and then start broadening your horizon to more long-term aspirations. When do you hope to retire, and what do you want your retirement to look like?
• Pay down debt. Before you invest, consider paying off credit card debt and any personal loans you may have—and make sure you have enough cashflow to cover ongoing expenses.
• Work with a financial professional if you don’t already. Financial planning can involve complex decisions, and it pays to have someone in your corner who understands your goals and can guide you each step of the way.

4-7: In good shape

You’ve started putting a financial plan in place, which is great! You’ve thought through specific goals and ways to meet them, which is crucial to your overall financial fitness.

Now, you’re ready to think about how you will create the life and the legacy you want. That might include giving to charity, setting up a trust fund for future generations, or comfortably saving for the unexpected. It’s never too early to plan your long-term saving and investing goals, even if retirement is many years down the line.

• Review your long-term goals and don’t be afraid to consult with a financial professional to help you plan your future. What do you want your retirement to look like? They can help you prioritize your goals and map out a clear path to get there.
• Shore up your investment strategy. A retirement account is a good place to start, but there’s much more to investments than a 401(k). And check to see if your investment strategy is set-up to be as tax-smart as possible.
• Make sure you have an estate plan in place. Getting documents in place like a will or trust – and a healthcare directive and financial power of attorney – is crucial to protecting you and your family in the face of unexpected events.

8-11: Building a strong future

Kudos to you! You’ve done the heavy lifting when it comes to your financial fitness and are building a strong future. You’ve taken the time to understand what you value and how your resources can support those values. You’ve learned that saving and investing simultaneously is a great way to meet both your short- and long-term goals.

Here are a few more ways to stay in top financial shape.

• Make sure your insurance policies are up to par. You’re building a strong future; make sure what you’re building is protected. The right insurance policy can help safeguard your hard work.
• Speak to beneficiaries about your estate plans. You likely already have a will and/or trust in place. But have you talked about your estate plan with your family? It might not be the most comfortable conversation but being upfront about how your money will be managed after you’re no longer around can eliminate potential confusion or unexpected emotions down the line. Plus, it might raise questions you hadn’t thought about.
• Schedule frequent check-ups for your investment strategy. It should change as you get older. Get an annual meeting on the calendar with your financial professional to discuss your investment portfolio and make adjustments as needed to stay on track.
• Look forward to your legacy. If there are charitable organizations or groups you want to support, explore ways to contribute for years to come. You can designate assets for charitable organizations in a trust, so that they receive your gifts even when you’re no longer around.

However financially fit you are at this moment, we can help. Start working with a financial professional today to create a strategy customized toward your financial goals.