Let’s play a game. A game that can help you see if you are ready for a financial emergency. So a serious game if you will.
We thought this would be a fun way to look at your financial readiness and see how you would fare if something went wrong. No one wants things to go horribly wrong, but life happens, and it is better to err on the side of caution.
Grab some scratch paper and record your answers, we’ll be handing out grades at the end.
1.Do You Have An Emergency Fund?
- I do have an emergency fund, but it would be exhausted in less than a month.(3 pts.)
- I have enough saved for 6 months of living expenses.(5 pts.)
- What the hell is an Emergency fund?(1 pts.)
- All of my money is invested in retirement accounts.(2 pts.)
- My emergency fund will cover me for 2-6 months.(4 pts.)
2.If You Lost Your Job Today, What Would Happen?
- Unemployment here I come!(1 pts.)
- No worries, I have enough savings and some side hustles that can help support me.(5 pts.)
- I would be concerned and would probably have to raid my 401(k).(3 pts.)
- Free at last, free at last, I am free at last! I better check the classifieds tonight.(2 pts.)
- Luckily, my savings should cover me till I find something new. I have some good contacts.(4 pts.)
3.What Would You Do With A Large Windfall Of Money?
- 50% savings and 50% to paying down my remaining debt.(3 pts.)
- A new phone is calling my name! I’ve had this one almost 18 months!(1 pts.)
- Dinner out with the spouse and plunk the rest into my investment account.(5 pts.)
- Catch up and get ahead a bit on bills.(2 pts.)
- Start an online business selling hemorrhoid cream.(4 pts.)
4.Do You Have More In Savings Or Debt?
- The couch I sleep on has at least $2 in spare change under the cushions.(1 pts.)
- I am tackling my debt, but don’t have much in savings.(2 pts.)
- Debt free and living the dream, I am living off of my investments.(5 pts.)
- As a business owner, I have a lot of business debt, but also a lot of savings.(4 pts.)
- My savings account would cover all of my outstanding debt except for my mortgage.(3 pts.)
5.Is Your Net Worth In The Negative?
- Yes I have some negative net worth, but I still have assets like cash and own my home.(2 pts.)
- No, I am cautious with my money and save way more than I spend.(5 pts.)
- I’m negative about everything, Bro.(1 pts.)
- No, my net worth is slowly growing each month.(4 pts.)
- Yes I have a negative net worth, but I am trying to get my debt paid off and am starting a few side hustles.(3 pts.)
6.What Is The Status Of Your Retirement Accounts?
- When I was laid off, I used my 401(k) to get me through.(2 pts.)
- I am saving 6% plus my employer’s match, I should be able to retire in about 30 years.(3 pts.)
- Currently I am maxing out my 401(k) contribution and the overflow goes into an IRA.(5 pts.)
- I retired right after high school, my parents love having me here.(1 pts.)
- With slow and steady determination, I am building an investment account that will take care of me one day.(4 pts.)
7.Do You Invest Outside Of A 401(k)?
- Investing is my favorite thing to do! I have an IRA and a Taxable investment account. (4 pts.)
- One day I will, but I am contributing to my 401(k).(2 pts.)
- I am living off of my investments right now.(5 pts.)
- I have a 529, an IRA, and my spouse has a Roth IRA.(3 pts.)
- Pizza is the best investment, way better than tacos.(1 pts.)
8.If Disaster Strikes, Can You Cover Your Deductibles?
- Paying all of my deductibles would wipe out my savings.(2 pts.)
- I could pay all of the deductibles and not miss a beat.(5 pts.)
- I had deductibles once, but my doctor said the antibiotics would cure them.(1 pts.)
- My low deductibles may mean a higher payment, but I can cover them with no sweat.(3 pts.)
- The emergency fund I set aside would cover all of my deductibles in case I lost everything.(4 pts.)
9.Where Would You Live In An Emergency?
- My insurance would cover any living expenses and I have an emergency fund.(4 pts.)
- I could afford to stay at a hotel for a few weeks, but then I’d be tapped out.(3 pts.)
- My second home in the mountains.(5 pts.)
- I have friends or relatives I could rely on, maybe.(2 pts.)
- Bridges offer great coverage from the weather, true story.(1 pts.)
- Bring disaster on, I am ready!(4 pts.)
- My life is already a disaster.(1 pts.)
- I am ready for a disaster, but it would hurt.(2 pts.)
- My preparation is in order, but I wouldn’t want to see a disaster.(3 pts.)
- I’ll be in Europe and I’ll have someone handle the details for me.(5 pts.)
0-10: We don’t need to tell you that you are living a vicarious and care free life. You are also leaching off the ones closest to you and not heading in any viable direction. Shape up.
11-20: This is where we fall in this quiz and we are not alone. The vast majority of Americans would land here as well.
21-30: You have a good idea of what it would take to get through an emergency situation, you just haven’t built up everything you will need. Keep going, you’ll get there.
31-40: Congratulations! You could weather the storm and make it through whatever life throws at you.
41-50: You have lived a successful life so far, and that success has landed you in a position of wealth and prosperity. You are more concerned with protecting your wealth and businesses than the speed bump of an emergency situation.
0-10: Get a job, work your ass off, and start providing for yourself. Create a life you can be proud of.
11-20: Push yourself to create an emergency fund that will cover everything you may need for up to 6 months. Get your debt under control and keep working to make your day to day life more efficient and goal oriented.
21-30: Just because you are on the right path, doesn’t mean you’ve reached your destination. Your consistency should be commended and with determination you will improve your readiness.
31-40: Keep on doing what you’re doing.
41-50: Pop the bubbly and I’ll meet you in Vegas.
Always Be Ready
The entire point of this quiz is to get you thinking about where you are in your financial life. Being prepared for a financial disaster is one of the ways we can look at our entire life and see if we have things in order.
It isn’t enough to have a small savings account in case your car breaks down or you get sick for a couple days.
Financial readiness means that if a hurricane swept through and you lost everything, you have the proper amount of insurance coverage, you can pay the deductibles, and you could manage to live until the insurance could start to cover your losses.
While that is only one example, it shows that these types of emergencies can and do happen, so we need to be ready for them.
So how did you do? Are there areas that you need to improve or are we meeting in Vegas one day? Let us know your score and if there are ways you could improve.