(Flickr / Thomas Hawk)Get on the right track.
When was the last time you really gave your finances a good once-over and determined where you stand with your money — and if you're happy in that place?
In their book "Picture Your Prosperity: Smart Money Moves to Turn Your Vision into Reality," authors Ellen Rogin and Lisa Kueng created a short quiz to help you figure out what your next money move should be.
Each question is meant to be rated on a scale of 1-10, 1 being "completely disagree" and 10 being "completely agree." Any rating below a 10 has room for improvement, although you might want to focus on areas rated 6 or below.
1. I am confident that my investment plan is allocated in a way that is appropriate for my goals.
Rogin and Kueng emphasize the importance of having your money in the "right mix" of different investment categories, such as stocks, bonds, commodities, and cash. "The right mix is different for everybody, and that's because we all need to make sure we match our investments with our individual risk comfort level and our long term needs," the authors write.
Take a look at this equation to see how your "right mix" should change over time.
The right mix is known as asset allocation or diversification, and ensures that if one investment category does not perform well, other categories will make up for, or at least lessen, the lapse.
2. I am satisfied with the amount of money I'm currently saving / investing.
The authors say it's crucial to know just how much you're saving and investing. This may seem obvious, but not everyone does. Rogin and Kueng recommend asking, "When you add up all of the savings and investing accounts that you contribute to regularly, what are you on track to accrue on a monthly and yearly basis?" Don't forget to include any retirement accounts you have.
Once you've figured that out, you can ask yourself if you're happy with that number. The authors point out that there's no one right number for everyone when it comes to how much to save or invest. It depends on "your personal situation and what your goals are for the future." Some things to take into account include children, retirement plans, and possible big future purchases such as a home.
(Flickr / Linh Nguyen)Communicate.
3. I communicate regularly and effectively with my spouse / partner about money (if applicable).
Rogin and Kueng say that money can have a very positive or negative affect on relationships. While experts say money conflicts can often lead to divorce, "openly communicating about money can also be a wonderful way for couples to build a strong foundation for reaching joint goals," according to the authors.