FINANCIAL INTELLIGENCE QUESTIONS TO ASK YOURSELF

Author: Joan Nakagwe 

Financial intelligence isn't about being a math genius; it's about asking the right questions. It's the ability to understand how money works, how it can work for you, and how to make sound decisions that lead to financial freedom. To build this crucial skill, you must become your own most challenging interrogator.

Self-reflection is one of the most powerful tools for financial growth. By regularly examining your financial mindset, habits, and goals, you can identify areas for improvement and make more informed decisions about your money. The questions below are designed to challenge your thinking, reveal blind spots, and guide you toward better financial outcome.

Here are some essential questions to ask yourself regularly to boost your financial intelligence and take control of your monetary life.

1.Understanding Your Money Mindset--Questions

Your relationship with money shapes every financial decision you make. These questions help you explore the underlying beliefs and emotions that drive your financial behavior.

What emotions do I associate with money? Consider whether you feel anxiety, excitement, guilt, or power when handling money. These emotions often stem from childhood experiences or cultural messages about wealth and spending.

What did I learn about money growing up? Reflect on the financial lessons, both spoken and unspoken, that you absorbed from your family. Did your parents argue about money? Were financial discussions taboo, or were they open and educational?

Do I view money as a tool or a goal? Understanding whether you see money as a means to achieve your values and dreams, or as an end in itself, can help you make more aligned financial decisions.

What fears do I have about money? Common financial fears include running out of money in retirement, not earning enough, or making the wrong investment decisions. Identifying these fears helps you address them rationally.

2. Evaluating Your Financial Goals --Questions

Clear, specific goals are essential for financial success. These questions help you define and refine what you’re working toward.

What do I want money to enable in my life? Think beyond generic goals like “be rich” to specific lifestyle outcomes like “travel for three months each year” or “start my own business.”

Are my financial goals truly mine, or am I pursuing what others expect? Sometimes we chase financial targets based on social pressure or family expectations rather than our own values and desires.

What would financial freedom look like for me personally? This might mean having enough passive income to cover your expenses, being debt-free, or having the flexibility to take career risks.

How do my short-term and long-term financial goals align? Your daily spending decisions should support your bigger financial objectives, not undermine them.

What am I willing to sacrifice to achieve my financial goals? Every financial goal requires trade-offs, whether it’s spending less on entertainment to save for a house or working extra hours to pay off debt.

3. Assessing Your Current Financial Situation--Questions

Before you can improve your financial position, you need to understand where you currently stand. These questions provide a comprehensive view of your financial health, and they focus on your current financial habits and understanding. They force you to confront your reality, good or bad.

What is my true net worth? Calculate all your assets minus all your debts. This includes everything from your home equity and retirement accounts to credit card debt and student loans.

Where does my money actually go each month? Track your spending for at least a month to understand your true spending patterns, not just what you think you spend. Many people earn a decent income but have no idea why they never have any money left over. Tracking every dollar you spend—for a week, a month, or even longer—is a powerful exercise that reveals a lot about your habits.

Am I living below, at, or above my means? Compare your monthly income to your monthly expenses, including savings. If you’re not saving at least 10-15% of your income, you may be living too close to your means.

What percentage of my income goes to fixed expenses versus discretionary spending? Understanding this ratio helps you identify where you have the most flexibility to make changes.

How many months could I survive without income? If your income stops when you stop working, you are trading time for money. Financially intelligent people work to build passive or residual income streams that aren't tied directly to their time. Your emergency fund should ideally cover 3-6 months of essential expenses, but the exact amount depends on your job stability and family situation.

 Am I an investor or a consumer? A consumer's mindset is focused on spending and acquiring things that depreciate in value. An investor's mindset is focused on acquiring assets that generate income or appreciate in value over time.

 What is the difference between an asset and a liability? This is a core concept of financial literacy. An asset puts money in your pocket (e.g., a rental property, a stock that pays dividends). A liability takes money out of your pocket (e.g., a car, a credit card debt).

4. Examining Your Financial Habits and Behaviors--Questions

Your daily financial habits determine your long-term financial outcomes more than any single large decision. These questions help you evaluate and improve your financial behaviors.

Do I make financial decisions based on emotion or logic? While emotions aren’t inherently bad, the best financial decisions typically involve both rational analysis and consideration of your values and feelings.

How do I research major financial decisions? Consider your process for choosing investments, insurance policies, or major purchases. Do you comparison shop, read reviews, or consult experts?

What triggers my impulse spending? Identify the situations, emotions, or environments that lead you to make unplanned purchases.

Do I regularly review and adjust my financial plan? Your financial strategy should evolve as your life circumstances, income, and goals change.

How do I handle financial setbacks or mistakes? Your response to financial challenges reveals a lot about your financial resilience and learning ability.

5. Analyzing Your Investment Knowledge and Compounding Strategy--Questions

Building wealth typically requires growing your money through investments. These questions help you evaluate your investment knowledge and Compounding strategy gaps.

Investment Questions

Do I understand the investments I own? You should be able to explain your investments and why you chose them without relying on jargon or complex explanations.

What is my risk tolerance, and does it match my investment strategy? Your ability and willingness to handle market volatility should align with your portfolio allocation.

Am I diversified appropriately for my age and goals? Younger investors can typically handle more risk, while those nearing retirement should focus more on capital preservation.

Do I let market emotions drive my investment decisions? The tendency to buy high during market euphoria and sell low during panics destroys long-term wealth.

Am I paying attention to investment fees and taxes? High fees and unnecessary taxes can significantly erode your returns over time.

Compounding Questions

 Am I leveraging the power of compounding? Compounding is the process of earning returns on your initial investment as well as on the accumulated returns from previous periods. It’s one of the most powerful forces in finance. The sooner you start, the more powerful it becomes.

 

  Do I have a written financial plan? A goal without a plan is just a wish. A financial plan outlines your short-term and long-term goals and details the steps you'll take to achieve them.

 Am I surrounding myself with financially intelligent people? Your network is your net worth. The people you spend time with can influence your habits and beliefs about money. Seeking out mentors or friends who are financially disciplined can be a game-changer.

 What is my biggest financial fear, and what am I doing to address it? Acknowledging your fears—whether it's poverty, debt, or job loss—is the first step to overcoming them. By creating a plan to address that fear, you move from a place of anxiety to one of empowerment.

6. Planning for the Future--Questions

Financial intelligence includes preparing for various future scenarios. These questions help you think through long-term planning considerations.They are the foundation of a solid financial plan. 

What does my ideal retirement look like, and how much will it cost? Be specific about where you want to live, what activities you want to pursue, and what lifestyle you want to maintain.

Am I prepared for major life changes? Consider how events like job loss, illness, marriage, divorce, or having children might affect your financial situation.

Do I have adequate insurance coverage? Evaluate whether your health, disability, life, and property insurance would protect you and your family from financial catastrophe.

What legacy do I want to leave? Think about how you want to transfer wealth to the next generation or causes you care about.

How will I maintain my financial independence as I age? Consider not just retirement savings, but also healthcare costs, potential long-term care needs, and maintaining mental sharpness for financial decisions.

 What is my contingency plan for an emergency? Financial intelligence means having a safety net. This can be an emergency fund with 3 to 6 months of living expenses. It protects you from having to go into debt for unexpected events like job loss or medical emergencies.

 If I lost my primary source of income tomorrow, how long could I survive without working? This question forces you to evaluate your emergency savings and your overall financial independence. The goal is to extend that survival time as long as possible.

 Am I investing for my future self? It's easy to focus on today, but a key to financial intelligence is delayed gratification. Are you consistently contributing to a retirement fund or other long-term investment accounts? Your future self will thank you.

 What is my personal inflation rate? Inflation isn't just a national statistic; it's a personal reality. Are your expenses rising faster than your income or investments? Understanding this helps you make smarter decisions about saving and investing.

Taking Action on Your Insights

Asking these questions is only valuable if you act on the insights you gain. After reflecting on these areas, identify the top three financial improvements you want to make. Start with the changes that will have the biggest impact or that you feel most motivated to tackle.

Remember that developing financial intelligence is an ongoing process, not a one-time event. Set a regular schedule to revisit these questions, perhaps quarterly or annually, as your circumstances and goals evolve. The goal isn’t to have perfect answers immediately, but to develop greater self-awareness and make progressively better financial decisions over time.

Financial intelligence ultimately comes down to understanding yourself, your goals, and the tools available to help you achieve them. By regularly asking yourself these thoughtful questions, you’ll develop the awareness and wisdom needed to build lasting financial success on your own terms.

By consistently asking yourself these questions, you are not just gathering information; you are developing a new mindset. You are moving from being a passive participant in your financial life to an active, engaged, and intelligent leader of your own wealth.

Written by Joan Nakagwe