Are You Money Smart?

Are You Money Smart?Last month I had the pleasure and opportunity to participate in a community event, Truth or Consequences:  The Money Game, with Host, Glinda Bridgforth, nationally known speaker and author of Girl, Get Your Money Straight. The afternoon was filled with high energy and excitement, as the participant played games like, “Budgets Are Right” and “The Money Feud”.  We concluded the event with a Q&A session for the panels.   Nefertiti, event sponsor and owner of Truth Book Store, called the panel “impressive” as we covered the range of personal finances questions from budgeting to bankruptcy.  

Here is a quote from one of the participants, Sabrina Cesar, “I had an awesome time yesterday… After leaving your workshop, I not only had a renewed sense of self and my concept of money and saving, I felt like I hit the lotto!  I am sitting here admiring all my gifts.  The greatest gift of that day, was meeting you (Glinda) and your staff (panel). You guys rock. I call the panel of speakers the Dynamic Five.”  

 

Curtis Lyon, Glinda Bridgforth, Dorethia Conner, Samirian Hill, Craig Buttignoli, Sabrina Cesar (front)

Being able to make a difference is why I enjoy my work; helping people move from money anxities to money harmony and on to the path of financial freedom.

IWhile the participants receive a refresher to sharpen their money skills, how money smart are you?  In the spirit of the “Money Games: Truth or Consequences”, take this fun quiz to test you financial IQ.   

1. Do you usually only think about money when you don’t have enough of it?

2. Do you know the interest rate and monthly fee (if applicable) on your credit card?

3. Do you have rainy day or emergency savings?

4. Do you know how much you spent on groceries last month?

5. Is more than two months of your annual income in checking accounts?

6. Do you regularly trade stocks?

7. Do you know how much money you need to retire?

8. Are credit scores used by employers to evaluate job prospects?

9. Do you tend to compare rates at multiple financial institutions when you buy financial products (e.g., checking accounts or credit cards)?

10. Do you rely on “free” financial services online to find bank products?

Answer Scoring Guide

Question 1: Yes = 0; No = 1
Question 2: Yes = 1; No = 0
Question 3: Yes = 1; No = 0
Question 4: Yes = 1; No = 0
Question 5: Yes = 0; No = 1
Question 6: Yes = 0; No = 1
Question 7: Yes = 1; No = 1
Question 8: Yes = 1; No = 0
Question 9: Yes = 1; No = 0
Question 10: Yes = 0; No = 1

Evaluation

If you scored 7 or higher, congratulations! You are likely in control of your money and well protected from tricks and traps. If you scored 3-6, be careful! You may be overpaying banks and other financial institutions for financial products and unnecessarily losing money. If you scored less than 3, schedule an appointment with an independent financial advisor or coach. It will save you a lot of money over the long-term.

 Answer Explanations

1. Do you usually only think about money when you don’t have enough of it?

We find that people that think proactively about how to use their money to get ahead are much more likely to succeed over the long term and avoid getting ripped off.

2. Do you know the interest rate on your credit card?

This may seem petty, but credit card companies can vary interest rates at their discretion and frequently do. Staying on top of these rates can save you a lot of money over the long term.

3. Do you have rainy day or emergency savings?

Behind divorce, one of the most powerful predictors of financial crisis is the lack of rainy day savings. Rich and poor alike suffer when unexpected expenses arise and force people to turn to their retirement savings, credit cards, or, worse, payday lenders. It’s much better to prepare for the unexpected ahead of time.

4. Do you know how much you spent on groceries last month?

It may seem petty, but this is an excellent proxy for how in control you are of your money.

5. Is more than two months of your annual income in checking accounts?

Over 30 million U.S. households store more than two months of their annual income in their checking account, unnecessarily losing billions of dollars in potential interest. Don’t be a statistic!

6. Do you regularly trade stocks?

Most people that regularly trade stocks lose money relative to the indexes.  Over the long term, active traders do not fair much better than passive investors.

7. Do you know how much money you need to retire?

It’s a basic question, but knowing this information is fundamental to your long-term financial health.

8. Are credit scores used by employers to evaluate job prospects?

Credit scores are quickly becoming a passport to economic mobility. They are used by an increasing number of industries to evaluate you, including a growing number of employers.

9. Do you tend to compare rates at multiple financial institutions when you buy financial products (e.g., checking accounts or credit cards)?

Shopping around for products before you buy them is an absolutely essential step you need to take to avoid paying unnecessarily high fees

10. Do you rely on “free” financial services online to find bank products?

Most free financial service sites online are free because they are paid by banks to peddle a small number of bank products, often carrying less attractive rates compared to what you can find by shopping around on your own or by using for-fee sites.

Source: www.HelloWallet.com

Samirian Hill, The MoneyWise Teacher, is the President and Founder of BudgetWise Financial Solutions, LLC. She is the chief editor and writer of the blogsite: www.budgetwisefinancial.com, and a columnist with Detroit Black Pages.  Samirian contributed articles to various financial and lifestyle blogs.  She enjoys golfing, cooking and reading.

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