Financial Health Quiz
Quiz: These Five Questions Can Diagnose Your Financial Wellness
Money matters. It impacts our stress levels, our relationships, our ability to give back. It's why so many people started out 2018 convinced this would be the year they finally master their finances. It's a good thought, but like most resolutions, it's likely to fail (92% of them do!).
Resolutions fail because most are grandiose. Emboldened by the crisp air and a fresh start, you vow on Jan. 1. to quit gluten cold turkey. No more gluten for you. At all. Ever. By Jan. 10, you've determined gluten is everywhere. And you really love it. Also, you've convinced yourself gluten isn't the real problem anyway, so you drop that silly goal and order fettucine alfredo for lunch, extra gluten on the side.
Experts agree, the best way to stick with a resolution - financial or otherwise - is to make small, incremental changes. Start with this quiz to see where you're at on the financial wellness scale today. Based on your answers, set a few achievable goals. Then, get on the phone with your banker and start checking off that list, slowly and steadily. Don't forget to celebrate your successes along the way (perhaps with a little gluten).
Do you look in the financial rear-view mirror or out the windshield?
1. Most of what I review are statements of what has already happened.
2. I'm given a good mix of reports, and a few are projection-based.
3. The data I receive on my finances always has some modeling, predictive or prescriptive element.
Does your CPA talk to other financial partners?
1. Not likely, I keep my relationships (insurance, bank, wealth, investment and others) separate.
2. Maybe, I try to keep them all informed as goals change or situations warrant.
3. Yes, every one of my partners is aligned and communicating on a regular basis.
When was the last time you actually saw your banker?
1. Never, we communicate via chat, email or phone (if we talk at all).
2. Not sure, but it's definitely been in the last 12 months.
3. Within the last quarter, we meet regularly to discuss how hard my money is working for me.
Do you know what your bank fees are?
1. I don't, but I'm sure someone is monitoring that.
2. I'm aware of some, but not all.
3. Absolutely. I watch those line-items very carefully, and when changes are made, I ask questions.
How is that "big dream" coming along?
1. Not well, but that's okay. Dreams are for kids. I'm over it.
2. Alright. I still think I can get there. It's just harder than I'd imagined.
3. Extremely well. I'm so close I can taste it!
If you answered mostly 1s, you may want to sit down with your spouse, business partner, financial analyst or personal banker (maybe all four!) to chart a new course.
If you answered mostly 2s, you are on your way to making your money work hard for you. Keep up the good work. You may want to consider setting a regular meeting with your banker to ensure you maintain this trajectory and set up a plan for taking it up a notch or two higher.
If you answered mostly 3s, you are living a financially healthy life. You have excellent relationships with your financial partners. Recommend them to your friends and colleagues. Too often, even high-worth individuals take a status-quo stance when it comes to their banking relationship. Tell them what they're missing!
Mark K Phillips is cash management services manager for Bank Iowa, Iowa's second largest family-owned financial institution. He can be reached at firstname.lastname@example.org.