Generally, a person will obtain life insurance and disability insurance either as part of their benefits provided by their employer or on their own through an insurance salesperson. Give yourself 2 points if you have purchased life insurance or disability insurance on your own. Give yourself 0 points if you have no life or disability insurance at all. Besides one's home, automobiles are generally a person's largest purchase. The car you drive is also perceived as a status symbol and is an area where even the most frugal person would consider being extravagant.
Home ownership provides a hedge against inflation and a tax-free means of accumulating wealth.
For this step, you will need to know the fair market value of your home and the current balance of any mortgages and equity loans on that property. If you own a home, you must calculate the value of your home's equity by subtracting the current balance of your mortgage and equity loans from the current fair market value of the home. Give yourself 1 point if the home's value exceeds the current balance of the mortgage and equity loans but you don't have enough equity to qualify for 2 points. Give yourself 0 points if you do not own a home, or if the amount that is owed on your home exceeds its fair market value. If your score is 8 or higher, you appear to be on the right track with your finances.