It’s okay if you’re still worried about a recession.
The drumbeat of economic news can be perplexing. Mortgage rates continue to swing up and down. Credit card debt has gotten more expensive. Although inflation is easing, the Federal Reserve has still indicated more rate hikes may be necessary this year to slow down the economy. And the stock market is seesawing in the wake of concerns about the banking sector, sparked by the closing of Silicon Valley Bank and Signature Bank.
I’ve teamed up with my colleagues to build a quiz to help you determine how current economic events could impact your finances. There’s no right or wrong answer. The questions are meant to help you to gauge where you stand financially. Your score — and our financial advice — could help you prepare for what’s coming if the economy worsens.
Question 1 of 10
Do you have enough money coming in to cover necessities?
Yes, my monthly salary or retirement income covers my housing, food, utilities and the cost of commuting
No, I often have to dip into my savings or use credit to help pay for housing, food, utilities or the cost of commuting
Question 2 of 10
Do you have monthly student loan debt that was difficult to pay before the pandemic?
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Question 3 of 10
Do you have emergency savings?
Yes, I have enough savings to pay my basic expenses for at least one month if I lost my job
Yes, I have more than three months of expenses saved
No, I don’t have any savings. I’m living paycheck to paycheck
Many American adults can’t cover a $400 emergency, such as a car repair or a modest medical bill, without borrowing from a friend or family member, or using a credit card and paying it off over time.
The Secure 2.0 retirement law passed in 2022 contains two provisions related to emergency savings. In 2024, retirement plans can allow employees two ways to save. Under one provision, they would be able to withdraw up to $1,000 for an emergency expense. This withdrawal is not subject to the usual 10 percent early withdrawal penalty for people under 59½. There’s also a provision that, if implemented by an employer, would permit employees to contribute to a Roth IRA that is designated as an emergency fund.
Read more: Michelle Singletary’s money milestones for every age
Question 4 of 10
Are you contributing to a retirement account?
Question 5 of 10
Do you have revolving credit card debt?
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Question 6 of 10
Do you have to pay for gas for the drive to work?
Yes, but my job isn’t far from my home
Yes, my daily commute is about 50 miles round trip
Yes, my daily commute is more than 100 miles round trip
I do not have to pay for gas or drive to work
Question 7 of 10
Are you looking to buy a home within six months to a year?
Question 8 of 10
Do you have a fixed-rate mortgage?
Not applicable because I rent or own my home outright.
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Question 9 of 10
Has your rent increased significantly?
Not applicable because I’m a homeowner
Question 10 of 10
Do you need to buy a new or used car soon?
You need to answer every question to see your result. You’re missing questions 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10.
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Source link: https://www.washingtonpost.com/business/interactive/2022/how-the-economy-affects-me/