Your Financial IQ

Q.1. What should I know in order to manage my finances well?

You need to know such things as the value of your assets including your investments, how well these assets are protected, and your fixed monthly overhead costs. Taking a quiz about how much you know of these things will help you identify the things you need to monitor.

Q.2. What are some basic rules for money management?

There are a number of things that you can do. You need to take control of your situation by planning for the future. In order to do that, know your financial situation, set goals, develop a realistic budget to achieve those goals and do not let expenses exceed income. Make certain that you distinguish between needs and wants and use credit wisely. A top ten rules checklist can help you with this task.

Q.3. What are some ways to “think smart” about money?

It is important to know the true value of money. Knowing the true cost of a lifestyle and making good purchasing decisions can allow you to have financial and personal freedom. The key is to have balance in your life and know your needs and wants. Balancing an appreciation for what you have with a desire for advancement is important for keeping a healthy perspective. Understand that time is money and knowing what is important to you helps you to allocate that time accordingly.

Q.4. What are some tips for improving my finances and keeping costs down?

There are a number of simple things that you can do. Always comparison shop and realize that virtually everything is negotiable. Purchase store brands over name brands. Buy used if possible. Exercise will power and avoid impulse buying. Track your daily expenses and use credit wisely. Pay yourself first – in other words put your savings aside before everything else to ensure that you are building that nest egg for the future.

Q.5. What are some ways to improve my net worth?

First of all, you need to calculate your net worth. Once you have done this and determined if your net worth is positive – your assets are larger than your liabilities – you can examine your spending habits and financial activities to see how adjustments can be made to improve your financial situation.