How Do You Feel About Your Finances?

Two years ago this month, I wrote a piece asking you to rate your financial well-being on a scale of 1 to 10 — 1 being poor and 10 being excellent. While acknowledging that everyone would have a slightly different version, I also made an attempt to define financial well-being. I’ve added two lines since then (at the bottom in italics) but here’s my running definition…

  • Freedom from worry.
  • The ability to spend as much time as I’d like with family and friends.
  • Knowing that I’m on track to accomplish the things that are most important to me.
  • My giving is at a level where I feel comfortable (or better yet, uncomfortable!)
  • I’m confident in the fact that I’m saving enough to reach my long-term goals.
  • I know that Crystal and the kids would be provided for should something happen to me.
  • I’m comfortable with the amount I am spending.
  • I have healthy money relationships with Crystal and those that I care about.
  • I have the capacity to absorb a financial shock.
  • I feel like I’m in control (of my finances and choices) rather than being tossed like a ship at sea.

However you define it, I believe that having a regular check-in on your financial well-being is one of the more important things you can do for yourself. If you’re married, it probably falls right after checking in on your spouses financial well-being! I don’t think it’s a stretch to say that how we feel about our personal finances has an oversized impact on our daily lives and even our marriages.

Lucky for us, the Consumer Financial Protection Bureau seems to agree with me and they’ve developed a free tool to assist us in our assessment. By answering just 10 multiple choice questions, you can get a sense of your own financial well-being.  You can also use their tool to compare your number against the averages for different age groups, income brackets and employment status. I will say that how you compare to others is probably less important than getting a sense of how you feel about your own financial well-being.

Click here to take the CFPB financial well-being survey.

My score was a 71.  Well above average, but as a financial advisor who works hard to take care of his family’s finances, I wanted it to be off the chart! I will say that just taking the quiz got me thinking about a few areas that I might improve upon. How could I take my 71 to a 73 or 75? With that in mind, here’s a quick list of ideas you might find helpful if you’re interested in improving your own financial well-being. There certainly are many things that could be added to this list, you may even discover some as you take the survey.

  • Start/restart using budgeting software – Mint, YNAB, etc.
  • Have a money conversation with someone you care about. Maybe ask them how they would rate their own financial well-being.
  • Work with an estate attorney to update or put in place a will and other important documents.
  • Create a financial plan – knowing where you stand goes a long way towards assuaging worry.
  • Review your insurance policies to make sure you have the appropriate amounts and types of coverage.
  • See if there’s something you can delegate to create space for something you’ve really been missing.

What’s your financial well-being score? Regardless of the actual number, if there are ways we can help you increase it we’d love to help. Just let us know.

 

Geoff Hall, CFP®
[email protected]

My wife, Crystal, and I have been married for eight years and have two kids, Cooper (7) and Rhodes (5.) When I’m not spending time with them you might find me downtown serving at our church, pushing my limits during a mountain bike ride or having coffee with a friend in the Five Points area. I've been practicing wealth management for 25 years and I'm thankful for the privilege of shepherding my family of clients through the ups and down of the markets and of life for that matter.