Simple Debt-Free Finance

A Simple Approach to Getting Out of Debt & Into Wealth

What’s your Financial IQ?

Posted on | August 5, 2008 |


Bills IQ
Here’s a nifty financial health quiz you might want to check out, it’s called “bills iQ”

Bills iQ is a set of multiple choice questions that are broken down into different sections. The sections include: Credit, Debt, Budget, Wealth, and Life Plan. They essentially start you thinking about taking stock of where your overall financial health is now, and lead you through to setting goals and planning various aspects of your life.

They score you as you go through each section and provide an overall “Bills IQ” on a scale of 0 to 100%. The great thing is not the score, but the overall report it gives you at the end. For each question you answer, it provides a response to your answer as well as any tips or hints for improving that various aspect of your financial health.

For instance, a question about the most important factor in determining your credit score will include steps you can take to improve your credit score.

Bills IQ is provided by Bills.com, which offers financial information and services like Debt consolidation, in case you’ve found yourself with too much debt to dig out from under by yourself.

I found myself $16,020 in debt one night and seriously contemplated such services. Of course, it didn’t happen over night - that was just when I realized what had happened. Debt accumulation typically happens in a slow bleed sort of way. Many relatively small purchases that snowball into 5 figure debt before you know what happened. That was my financial tipping point. That was when I finally woke up and decided to take control over my money, for I had unwittingly let money gain control over me.

For a while, I considered pursuing debt consolidation avenues. I thought about taking out a HELOC (Home Equity Line of Credit) or a personal loan to consolidate my credit card debt. In the end, I received a 0% interest offer from one of my credit cards and opted for that instead. It worked well because I stopped accumulating more debt, and I paid off the balance before the interest reset.

Not everyone can be so lucky and 0% offers are harder to come by since the credit crunch has caused the banking industry to slow down their lending.

If you’re lucky enough to have home equity, but unlucky enough to have found yourself in debt despair as I was, then a HELOC might be useful. You can often consolidate credit debt, which can run as high as 27%, into a second mortgage as low as 6% and the interest is tax deductible.

What ever path you take, just be sure you resolve yourself to doing what it takes to pay down your debt. Also, become financially literate and change your behavior to avoid finding yourself in the same place in the future. That’s what I did and I have absolutely loved sleeping well at night ever since.

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