Financial Readiness – My 5 Stages of Grief

financial_readinessMy personal bank – which also offers insurance and investments – recently invited me to discover my ‘Financial Readiness’ score, available in five minutes by taking a quick online survey.

Now, I am a competitive person who likes to win. For example, I know my SAT scores from high school, as well as my fastest one-mile and marathon racing times, by heart.

As a finance guy, I knew I would rock the Financial Readiness score. Bring. It. On.

The online survey asked me about my type of work, personal annual income, plus household income. Not bad, I thought, not bad.

Next, I answered questions on whether I rented or owned a home, the size of my monthly housing payment, and whether or not I budgeted. Home ownership, yes, budgeting, not so much. I hate budgeting.

Further questions prompted me to discuss my insurance against disability or loss of life, my dependents, and my retirement savings and investments. Well, I like to think I don’t over-insure, but I do have some retirement accounts.

Finally, the survey asked about whether I have documented my will, and whether I have named a health-care proxy. Yes. Totally. Nailed it.

My score

At the end of the survey my pulse quickened in anticipation of a huge pat-on-the-back for my incredible financial readiness.

I got a 66. Out of 100.

What?! Me? There must be some mistake.

A 66?

I’ve never gotten a 66 on anything in my life. Even worse, a 66 on my finances?!

I have three thoughts about my Financial Readiness Score.

financial_readiness_score
A 66?!

My first thought I already told you, which is: “What?!”

That thought represents “Denial” and “Anger” steps in my five stages of grief.

Second Thought

My second thought – (possibly part of “Bargaining and “Depression”?) – came from a closer review of the Financial Readiness plan which my bank provided, following my score.

My Financial Readiness Report showed areas where I could improve my score, by reviewing and changing my approach to savings, planning, and financial protection.

The report suggested setting budgetary goals. That’s probably not happening. It also prompted me to consider upping my insurance coverage. Not surprisingly, my bank is also involved in savings accounts and insurance, so you can see a bit where they’re coming from.

I’m not saying their wrong. I’m just saying they have an agenda.

I have strong feelings about some of these things, and I think on at least a few topics, reasonable people could disagree.

Building an “Emergency Fund” – which my report strongly encourages – happens to be something which I philosophically disagree with, as I’ve written about in the past. LINK [http://www.bankers-anonymous.com/blog/some-terrible-financial-advice-the-emergency-fund/]

Boosting my auto-insurance total coverage, or my wife’s life insurance coverage – also recommended by my Financial Readiness report – also is something I’m not likely to do, as I’m philosophically an insurance minimalist [LINK: http://www.bankers-anonymous.com/blog/guest-post-dont-buy-too-much-insurance/]

In exploring these areas for boosting my score, I noticed robust prompts to action. In modelling out my retirement planning, for example, I got a chance to see how my intended retirement age, as well as my appetite for risk, would affect the probability of meeting my retirement goals. It was pretty cool, actually.

Third Thought

financial_readinessMy third thought about my Financial Readiness score, as I move toward “Acceptance,” is that these simple but potentially catalytic surveys – paired with calls to action – might be quite useful. Let me expand on that thought for a moment.

Most of us need financial guidance. A fundamental theme of my financial writing is that almost nobody feels confident that they have all their finances figured out, yet few know where to turn to a trustworthy source.

We don’t like banks. We don’t trust our financial advisor. Insurance confuses us. The last thing we want to do as adults is spend precious free time with a lawyer to talk about what happens to all our stuff when we die. In all that confusion and natural aversion, we tend to not even know where to begin. So, like everybody else, we punt decision-making until some medium-distant future, maybe months from now, maybe when a crisis happens, or maybe until never.

Possibly, a five-minute internet-style quiz from my bank becomes the on-ramp to better planning and decisions?

I mean, not in my case, since the quiz is obviously flawed and they got my score wrong. But, you know, maybe for others.

 

A version of this appeared in the San Antonio Express News

 

See related posts

Why I hate my bank

Emergency Fund – That Silly Sacred Cow

Insurance

 

 

 

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I founded Bankers Anonymous because, as a recovering banker, I believe that the gap between the financial world as I know it and the public discourse about finance is more than just a problem for a family trying to balance their checkbook, or politicians trying to score points over next year’s budget – it is a weakness of our civil society. For reals. It’s also really fun for me.

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