Personal Finance Quiz – Is Your Financial Thermostat Set High Enough?

When life became more than just a matter of food, clothing and shelter, and money was invented as a means of paying for goods, the concept of personal finance and its management was born. Nowadays, managing personal finance usually starts with handling pocket money at a young age. What matters is not how much money comes in, but how you spend it. Are you budgeting your money in a way that will enable you to create wealth for yourself later on? Let us find out…

1. Have you made a financial plan?

Financial planning is an active process that entails regular monitoring and evaluation, and it is a key factor of personal finance. The first step is assessment, where you review your financial state of affairs by compiling basic versions of balance sheets and income statements. Next, you need to set goals. Wikipedia gives the following two examples: “buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income;” and “retire at age 65 with a personal net worth of $200,000.”

2. Do you know your credit score?

Your credit score is a number that represents your calculated measure of risk. The lower your consumer credit score, the higher the interest rate you will be charged, and companies routinely use your credit score to calculate the rate you will get for a loan. Potential employers may also do a credit check for employment to determine whether you are financially responsible. In short, a good credit score is important to your financial well being because it can save you a lot of money in interest charges, and it is easier for you to obtain further credit, which you can use as leverage for investments.

3. Are you using your credit cards wisely?

A credit card can be either a helpful asset or a dangerous liability – just like any other tool. Using these innocent-looking pieces of plastic improperly can do severe damage to your wallet. Know your spending habits, and pay your credit card balances in full every month when your statement arrives. Failing to do this will lead you into the worst kind of debt, with some of the highest interest charges in the financial world.

4. Do you have financial vision?

Empire builders like Bill Gates and Sam Walton are not just great businessmen. Transforming industries and spawning new ones like these self-made billionaires have done takes vision. Do you have the vision to raise your financial situation from where it is now to possible cracking the $1 billion barrier? Your ability to create financial success for yourself is something like a thermostat – it will only go as high as you set it. If you can expand your vision, there is no limit to how successful you can be.

T. Harv Eker, globally acclaimed speaker and author of 11 top-selling books and courses says, “There is a secret psychology to money… your outer world is simply a reflection of your inner world!” According to Eker, if you give him 5 minutes, he can “predict your financial future for the rest of your life.” His Millionaire Mind course, available through http://www.KentAndHarv.com, is very powerful, and if you learn his personal finance approach and use it, your financial life will change permanently.

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