Stress Test your Financial Health
We get annual health checkups to stress test our health and we should do the same with our finances. Our Certified Financial Planner, Denisa Tova, is here to tell us about a simple way to stress test your financial health.
An Ohio-based, Certified Financial Planner, Karin Maloney Stifler, developed a simple tool to help you examine several areas of your finances. It will show you which areas are OK and which ones really need your attention. Let me highlight a few.
The tool will:
- Rate your cash reserve and how well you are prepared for emergencies.
- · Tell you if you are saving enough
- · How you handle your debts. Do you pay them on time and in full, or make just min payments….or are behind.
- · Rate your credit score. Is it good enough to get credit without paying an extra interest?
- Rate your financial preparedness in the event of your death. Do you have enough life insurance, and do you have a current will…
So once you go through this exercise, what will you find out?
Each response to the question will give you certain amount of points. You add up the points and it will tell you how financially fit you are. The range of outcomes could be anywhere from “Congrats your finances are healthy ..to.. get help now!”
Many people will end up somewhere in the mid range. This will at least give you an idea which financial areas you only need to fine-tune and which ones really need your attention. Plus this is a great way to learn about your own finances and get a financial conversation going.
Take the Financial Stress TestAlertMe