Improving your Financial IQ

Improving your Financial IQ
BY ABIODUN MAMORA
PRESENTED @ DAYSTAR STATISTICS UNIT ANNIVERSARY
DATE: 22 AUGUST 2015
Abiodun Mamora | Finance Professional | abiodunmamora@gmail.com

What is Intelligence Quotient?
Intelligence Quotient (IQ) assesses your overall intelligence level
while Emotional IQ measures your ability to control your emotions.

Financial IQ measures your ability to manage your finance in a consistent
manner i.e. it’s a reflection of how well you are able to handle money.
A high Financial IQ reflects the ability to make smart financial decisions
and take the right action to better your financial circumstances and attain
your financial goals. It’s a function of knowing what to do with available
resources to create maximum benefit.
Definition of Financial IQ

‘As for those who use the ‘I don’t have enough money to manage’ rationale,
they are looking through the wrong end of the telescope. Rather than say
‘when I have plenty of money, I’ll begin to manage it’, the reality is when
you begin to manage money, you will have plenty of it’ - T. Harv Eker
Is this for me?

Factors that influence the way you manage your money
1. Quality of information: Availability of options and sufficient knowledge
to make the right choices.
2. Time perspective: The longer the time you take into consideration, the
better your financial decision.
3. Sense of priority: Your ability to prioritize helps to ensure more
important expenses are not sacrificed for less important ones. Consider
first thing first!
4. Accountability: The presence of an accountability partner place a
higher degree of responsibility on you when making financial decisions
5. Competitive mindset: The degree to which you react to the spending
habit in your environment influences the quality of your financial
decision.

This exercise will help to reveal the extent to which you are
taking responsibility around the 5 factors above for your
financial soundness.
It will reveal your strength and weakness which will enable you
take practical steps that will aid your journey to your financial
paradise.
Purpose of the Assessment

‘To those who use well what they are given, even more will be
given, and they will have an abundance. But from those who do
nothing, even what little they have will be taken away’ – Holy Bible
Here is a secret

Taking the Financial IQ Assessment
There are 20 questions in total derived from the 5 factors earlier explained.
You are required to tick the appropriate box with the most suitable option
ranging from 0 to 4, where 0 represents ‘not at all’ and 4 represents ‘at all
time’.
The addition of your individual scores for all questions will give you the total
score. Your total percentage score will be derived by dividing your total
score by 80 and multiplied by 100.
This percentage score could fall within any of the following financial IQ
bracket; Above average, Average or Below average.

Questionnaire for Financial IQ Assessment
Kindly complete the questionnaire below with the most suitable option
ranging from 0 to 4, where 0 represents ‘not at all’ and 4 represents ‘at all
time’. See detail in the rating guide.
Please read the questions carefully and ensure your options are a true
reflection of your current status to derive the maximum benefit from this
exercise

S/N Question 0 1 2 3 4 Score
1 I consider other available options before making a buy
decision
2 I will not sacrifice a long term plan for immediate desire
3 I have a clearly written spending plan which influences my
decisions
4 I am abreast of key financial indices such as inflation rate,
interest rate, etc
5 I am not moved to buy ‘latest design’
6 I consider long term investment ahead of consumables
7 I keep record of my spending and review my bank statement
regularly
8 I usually disclose my financial activities to someone at
specific intervals, voluntarily or upon request
9 I save a certain percentage of my earning on a consistent
basis
10 I seek the opinion of others when buying a new product
Rating Not at all Maybe Sometimes Often time At all times
Score 0 1 2 3 4
Rating Guide
Financial IQ Questioner

S/N Question 0 1 2 3 4 Score
11 My friends and close relatives encourage me to save and
invest
12 I have designated sources of information for my financial
decisions
13 I usually execute my spending in the order of importance
14 I am in touch with current financial news both local and
international
15 I look forward to saving more than spending
16 I always overcome the temptation to buy what I don’t need
17 For major capital expenses, I involve professionals before
making a decision
18 I do set aside any excess on my consumption budget
19 I always seek for opportunity to improve my knowledge of
investments opportunities
20 I have a written financial goal which I review regularly
Total Score
Percentage Score
Financial IQ Questioner - Continuation

Total Score Financial IQ Band Action Step
Below 45% Below Average Identify the weakest points and make deliberate effort to improve.
You may seek expert advice for more personalized action steps
Between 45-55% Average Improve on the high ranking point for more effectiveness and
design actionable steps to remedy the weak points
Above 56% Above Average Congratulations strengthen the high ranking point and improve the
others. Then aim for a higher financial goal.
Financial IQ Interpretation

The Author
Abiodun is a young lady with vision to provide global leadership
through financial services to corporate bodies, institutions and
nations.
She has five years’ experience in functions cutting across financial
accounting, auditing, management consultancy, internal control
and regulatory compliance.
The skills that have underscored her outstanding performance
over the years are: reconciliation, administration and team
leadership.

Improving your Financial IQ

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