Friday, May 8, 2009

Snapshot of Financial Health

While chilling over at Budgets are Sexy, I ran across this CNN Money tool that gives you a snapshot of your overall financial health in a nutshell. While J. scored a B+, I came in just under that with a B:

I feel great about all the debt I’ve eliminated and am pleased to have scored so high considering how bad things were 5 years ago. I am most concerned about building up emergency savings. The issues with life insurance (not even sure if it’s accurate – I don’t remember the amount I get through work) and retirement savings are on the back burner. That’s what personal finance is all about – figuring out what important to me and making my money work towards my goals.

Right now, Cute Man and I are focused on saving up to buy a house/condo and start a family. Once those things actually come into play, I’ll certainly look into the life insurance piece more carefully, but for right now, it’s not a concern. As things stand now, each of us could handle the rent/expenses on our own, if need be. As for retirement savings, I think it’s important not to leave money on the table so I’m contributing what I need to get the employer match. I had been contributing more, but I cut it back in favor of building the E-fund and saving to buy a house. We simply can’t do everything so we prioritized. I feel good that I am putting money away each check for retirement but I know that it’s not a whole lot. Thank goodness for compound interest, at least.

So how’s your financial health? Have you tried the tool and did you think it was an accurate indicator?


Char said...

I think IRA and maybe [I don't know? if 401(k)] can be used for downpayment for first time homebuyers on a home without having to pay the 10% penalty for early withdrawal.[payment of regular tax may have to be paid, tho)


Yes, I do believe that’s true but doing that would defeat the beauty of compound interest working for retirement! I’m not currently saving “a lot” but I’m at least going for the employer match. If I leave it alone, it will grow tremendously over the next 35 years. I could also borrow against the money in my 401k but that’s risky. If I lost my job, I’d have to pay it all back right away. I have no such worries but you never know.

The great thing about the NACA program ( is that they pay all closing costs and you don’t need any down payment. If you have one, it goes toward buying down your interest rate (which is already below market rate). Also, while going through the process they make you save the difference between your current rent and future mortgage to prevent payment shock. That money could be used to buy down the rate but I’d rater keep it as a cushion.

J. Money said...

Glad you had fun with it too! It's a pretty fun game :)


Thanks, J! I love this stuff.