Happy Monday! Do You Consider Yourself Financially Secure?
Time magazine purports to be able to tell us “four traits that financially secure people all share.” Which is kind of funny, considering that I don’t exactly think of Time Inc. as the paragon of thrift and sustainability (“the company Henry Luce founded is struggling to find its way in a digital world”). Do what I say and not what I do, perhaps.
Regardless, here are the questions to ask yourself to figure out if you’re “financially secure”:
- Are you in control of your day-to-day, month-to-month finances?
- Could you absorb an unexpected financial shock?
- Are you on track to meet your financial goals?
- Do you have the freedom to make choices that allow you to enjoy life?
Not really; depends what kind; what goals?; yes.
Lest we feel too bad in the aftermath of this quiz-let, Time hastens to reassure us:
To be clear, a minority of the population has achieved this state of financial zen. According to a recent Bankrate survey, 62% of Americans don’t have enough cash savings to cover a single unexpected bill such as a $500 car repair or a $1,000 visit to the emergency room. That shocking result agrees with government statistics. The Federal Reserve last year found that more than 50% of Americans couldn’t fund a $400 emergency expense out of savings. The same survey found that roughly 60% don’t have a rainy-day stash sufficient to cover at least three months of expense.
If you are among the financially secure elect, congratulations! According to research by the Consumer Financial Protection Bureau, you probably benefit from:
1) An internal compass
3) Emotional control
In other words, you are able to tune out the irritating voices of advertising and your neighbors alike and make decisions based on what you value; you work hard; you are able to delay gratification and focus on long-term goals; and you trust yourself (you have “financial self-efficacy,” in CFPB jargon).
If your internal compass is wonky or your emotional control has sprung a leak, though, don’t fret. Apparently these are skills we can all hone, though the article ends with that optimistic declaration and doesn’t mention how to improve, aside from a simple exhortation to “practice.”
What do you think? Do you meet their four criteria but don’t consider yourself financially secure (yet)? Do you not meet the criteria but consider yourself financially secure anyway? Do you call nonsense on this whole endeavor?