I recently discovered this cool new tool – the Financial IQ test at Bills.com. I love quizzes, so this was perfect for me. It also reminded me that I need to move certain financial moves up my to do list.
About the Financial IQ Test
The test asks questions in five categories: Credit, Debt, Budget, Wealth, and Life Plan. Each section has five to seven questions.
As you can see, I scored 91%, this time. Two days ago I scored 88%, with a 70% score in the life plan section.
Where I Lost Points
When I took it this time, I changed my outlook on retirement from “scared” to “uneasy,” which boosted my score 20 points. I am truly uneasy. Given the financial bills the government faces and the likelihood that my daily expenses will continue to rise due to circumstances outside my control, I’m very concerned about the future. Taxes have nowhere to go but up over the long term, which will also make it harder for people my age to balance all our expenses and put away money for retirement. I’m certainly not counting on the nickel I’ll get from Social Security.
I also got low points in the budget section. I suspect it’s because I put my savings goal as 10% (rather than more than 10%) and haven’t shopped for lower insurance rates recently. I do use the lowest rate insurer in Los Angeles, though, so I’m not sure I agree with losing points for not checking regularly.
I most likely lost a few points in the Life Plan section because my husband and I don’t yet have a will. I know we should have one, but right now all our accounts are joint or we’re designated as each other’s beneficiaries. We don’t own a home, so we don’t have many assets to pass on. We do have Health Care Power of Attorney forms filled out, though. Even if you don’t expect to leave much, you should have of these. Get them free at Compassion & Choices.
Points That Made Me Think
The wealth section asks about life insurance. I selected “No, but I’m reviewing my options” because the question reminded me to research a few plans to compare to the offer sitting on my desk, and then complete it and send it in. I keep meaning to do that, but it just never happens. My husband has some coverage through his professional association, but probably not enough. I don’t have any coverage on myself. Even though we don’t have kids or a house, we would both struggle financially if we lost the other one suddenly. Having a cushion is important.
The other question that made me think was my expected retirement age. I marked 60-65, but I don’t really know for sure when I want to retire. I’m not even sure what retirement really means to me. I need to sit down and figure that out one of these days.
Compare Yourself to Others
The quiz had a section to compare myself to others. It doesn’t store any personal data, just asks a few demographic questions for comparison purposes. I was above average or on par for nearly all demographic factors and quiz categories except budget, where I was usually just slightly under the average. I need to work on that one!
Overall, the quiz was a wake-up call for some areas and a nice pat on the back for others. It’s also a fun way to impress your friends and co-workers. I told a couple co-workers about the quiz and soon several people in the office were comparing their scores.
What’s your financial IQ? Tell me in the comments!