Karin Bonding’s Financial Health Quiz

Answer these nine questions to assess your own financial health.

1. Do you balance your checkbook either online or in hard copy?
2. Do you have a savings account for rainy days?
3. Is your health/property/car and life insurance adequate?
4. Do you have a budget?
5. Do you completely pay off your credit card bill each month?
6. Is your mortgage payment less than 28 percent of your before-tax salary or your rent less than 30 percent of your after-tax salary?
7. Is your car loan less than 36 months?
8. Do you contribute to your 401(K) or other tax-sheltered savings plans?
9. Will your mortgage be paid off by the time you retire?

If you answered yes to seven or more questions:
You understand the benefits of spending less than you earn. You maintain your peace of mind with savings to tide you through unexpected events. Be extra protected by making sure you have at least three months of your expenses available to you in liquid assets at all times.

If you answered yes to four to six questions:
Your finances are an important aspect of your life and deserve your attention, even if you don’t enjoy sitting at the kitchen table with a calculator. A little time spent every month budgeting your expenses and planning your financial future will have great dividends. Remember that borrowing money always costs more than paying up front.

If you answered yes to three or fewer questions:
You have encountered some bumps in the road toward financial security. Take a sober look at your debts and your expenses. Make a plan to pay off debts with the highest interest rates first—most often your credit cards. It may take a few sacrifices in the short term, but financial health will make you feel less burdened for a long time to come.

Special Report: The University and the Economy

This article appeared as part of a larger section on how the recent economic turmoil is affecting UVA and its alumni. Read more:

• On the Front Lines
  Alumni and faculty experts share their perspectives on how we got into this situation—and how to get out of it.
• Time and Money
  A timeline tracks how the University has weathered economic ups and downs throughout the years.
• In the Classroom
  As economic events unfolded, some professors threw away their syllabi and kept pace with breaking news.
• Your Financial Health
  Assess your personal finances with a quiz from McIntire professor Karin Bonding.
• A Different World
  A first-person perspective on how Circuit City’s collapse altered the career path of one alumnus.