The Broke Test



THE BROKE TEST
How close to bankruptcy are you?


Question 1: How much money do you have in savings?
a) Two weeks take-home pay. score: 0
b) Three months take-home pay. score: 5
c) Six months take-home pay. score: 10

Question 2: What fraction of your take-home pay do you save?
a) 0-2% score: 0
b) 3-6% score: 5
c) Above 7% score: 10

Question 3: How much of your credit card purchases do you pay off each month?
a) Almost always pay the entire balance. score: 5
b) Pay entire balance most of the time. score: 10
c) Almost never pay the entire balance. score: 0

Question 4: How many times a year do you withdraw from your savings to pay bills?
a) Six times. score: 0
b) Three times. score: 5
c) Never. score: 10

Question 5: How much life insurance do you have?
a) Six to eight times of my annual income. score: 10
b) Two to five times of my annual income. score: 5
c) One to one and a half times of my annual income. score: 0

Question 6: What is your maximum coverage provided by your medical insurance?
a) 0 to $20,000. score: 0
b) $20,000 to $50,000. score: 5
c) Over $50,000. score: 10

Question 7: How much do you spend for housing, including utilities?
a) Half of my monthly take-home pay. score: 0
b) One-third of my monthly take-home pay. score: 5
c) One-quarter of my monthly take-home pay. score: 10

Question 8: How much of your monthly take-home pay does it take to make your payments, including your car, but not counting housing and utilities?
a) 30%. score: 0
b) 20%. score: 5
c) Up to 15%. score: 10

Question 9: Having established a reasonable savings and insurance program, my additional investments are:
a) Very conservative (savings accounts only). score: 5
b) A mixture of savings, stocks, real estate. score: 10
c) I have no additional investments. score: 0

Question 10: How much of your income will your retirement plan provide, including social security?
a) 60% of income with inflation protection. score: 10
b) Less than 60% with no inflation protection. score: 0
c) Less than 60% with inflation protection. score: 5

------- HOW DID YOU DO?
Add up your points and compare to the table below.
75+ Great
55-75 Good
40-55 Some problems
Below 40 See a credit counselor or financial manager
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