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Our Financial Health = C+

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CNN.com has an interesting calculator that takes financial factors such as mortgage payment, debt payments, life insurance value, etc. and assigns you a letter grade. I answered their questions and we got a C+. For giggles, I had to see how we would have graded three years ago.

We got a C. I have a feeling that this calculator doesn’t give partial credit! LOL.

In any case, it’s a pretty neat calculator that highlights your trouble spots and could be a nice resource for those staring on their debt reduction journey.

Hat tip to The Yellow Piggy Bank. She got a B+!


17 Comments

  • Reply Ashley |

    I just tried to play with that site and it wouldn’t let me. I entered my age and income, and when I hit “go” a little balloon came out and said “please enter a positive number between 25 and 60.” LAME! hahahaha

  • Reply jennifer youngblood |

    That calculator is STRICT! It is also rather inflexible. I’m a student so clearly I don’t have any money invested in my “company’s” stock. My portfolio is not diverse: I have no money in the stock market since my student income is variable. Right now all my investments (basically CDs) are no-risk. I don’t have any life insurance because I don’t have any dependents but it still gave me bad marks for that. :/ I got a B.

  • Reply Jay Gatsby |

    Interesting calculator, but it doesn’t take into account that many people have more than 50% of their net worth in cash right now due to the brutal bear market. Likewise, it assumes you need a substantial amount of life insurance, even if you don’t have any kids yet. Finally, it doesn’t take into account that your spouse works and has retirement savings of his/her own.

  • Reply traineeinvestor |

    A rather simplistic calculator. As an example, it assumes that stocks, bonds and emergency savings are the only investment options. Other itmes such as life insurance simply didn’t have the flexibility to address individual circumstances and there was no flexibility to input a projected retirement date, expected returns, expected changes in expenses post-retirement etc etc etc.

    All in all, pretty useless.

  • Reply Jaime |

    Don’t feel bad Tricia! I am debt free, have $20,000 in emergency savings, and still got a C+! I’m underfunded for life insurance (by choice!) and am not investing in retirement right now since I mostly am a stay at home mom. (oh and my house payment is a bit high)

  • Reply Susan |

    I got a B+ which is good I guess. It’s certainly not a perfect calculator, but if it makes people think about their investments, savings, and life insurance, well, that’s a good thing.

    Does anyone else think that having 10x your salary in term life insurance is all a ploy by the insurance companies to make more money? My spouse and I each have enough to pay off the mortgage in full and put a nice chunk away for college. It’s not enough for the other person to run off to Fiji – but they won’t have to worry about losing the house, or college.

  • Reply Jen |

    I got a B+. According to the calculator I don’t have enough life insurance and I’m not saving enough for retirement. I disagree on the life insurance since I don’t have any children or dependents. I have coverage for one year’s salary so my family can bury me and maintain my condo before they sell it. If the calculator wanted to be more accurate it should have asked if you’re married, have children, etc. so it could take into account these things. Seriously – 5 years’ worth of salary as life insurance for me? That’d make me worth more dead than alive!

    I know I’m not saving enough for retirement, but I cutback my 401(k) contributions to beef up my emergency fund. Once I’ve got 6 months’ worth I’ll max out my 401(k).

    Another failure of the calculator, and I think this would apply to all these types of calculators, is everyone’s retirement savings are probably down because of the market. I lost around 40%, so any financial planning calculator I use is going to say I don’t have enough.

  • Reply PK |

    I too think the calculator is quite lame. It says I got an A+ but I’m not sure why. I don’t ever feel like I’m doing enough to ensure my family’s future.

  • Reply Matt |

    Thats a neat little tool though I would say that it only gives a very high level indication of your financial situation. I am still loaded down with debt and it said I had a C+ rating. What about something like equity in your home? That wasn’t brought into the picture and I’m sure if it was it would have raised my score.

    Either way a fun little calculator

  • Reply Marie |

    Hmm … A – We’ve only been out of college 1 year so of course we have insufficient retirement 12 months later. I’m suprised that it thinks 3 months is a sufficient emergency fund. I wouldn’t think you should get an A unless your debt free except the mortgage and we have a lot of student loans. I think its shortsighted to only look at the payment and not include the entire amount owed,

  • Reply Corporate Barbarian |

    I got a B. I have only 2 year’s worth of life insurance, and my retirement savings is too low. Well, it would have been doubled if I’d taken the test last year!

  • Reply Debt-free Dan |

    I took this a few days ago. I’m debt free including the house. I have an emergency fund. Am saving 15% for retirement. I got a B.

    It said I don’t have enough insurance and I have too much company stock. I fiddled with the calculator and found that if you have 99% of the insurance it recommends, it still tells you that you have “insufficient” insurance.

    So I concur with the “too inflexible” comments above.

  • Reply Rini |

    B. Ironically, it thinks $1500 in debt payments every month is right on target. *stare*

  • Reply Beth |

    I got a B as well. Marks taken off for not having enough for retirement, not enough life insurance (five years? seriously?) and I’m not diversified — though the calculator seems to think that 90 percent of my portfolio should be in stocks. (Why, I wonder?) The calculator also couldn’t account for my savings account (future down payment on house).

    I’m in Canada, so I don’t know how accurate this is in my case.

  • Reply Grace |

    Actually, this is my least favorite calculator because I don’t trust its results. I got a C so maybe I’m just being cranky. But why on earth would this 60 year old single woman with no minor children need ANY life insurance?

  • Reply Kevin |

    I have a C according to them. But, like several people mentioned, I was penalized for things which I should not have been.

    I currently have a small life insurance policy. But I am single and have no children. So I don’t need a large policy. I just need enough to cover the costs associated with burying me and handling the related expenses.

    I also don’t have enough in savings. But I am focused on hitting my debt pretty hard so I am pleased to have as much as I do (1.5 months).

    My place of employment doesn’t have stock and I don’t have much to invest in stocks right now. I put away only about 10% of my takehome for retirement… again, debt it priority #1 now.

    I carry too much debt according to the test. I know that. But it’s almost all student loans. I don’t carry credit card debt. I have a small car loan and my mortgage. Nothing else. It’s not good but it’s certainly not horrible.

    It was interesting but not really accurate for me.

So, what do you think ?