Self-Test to check your financial future

Are you floating in income or drowning in loan?

These days it is very hard to sustain a comfortable living even with two or three earnings in a household. Fighting out daily odds is getting more difficult leave alone spending on luxury and parties. This is due to the daily growing cost of living.

Inflation and cost of living are going up. How are you going to balance the rising costs and meeting their daily needs? How much do you know about Investment, Expenditure, Insurance and how do you plan your future ? An online search related to a financial survey exercise lead to some startling and surprising facts:

  • About 55% have Personal Loans
  • 57% have Credit Cards and spend about $300 using credit cards
  • 46% are not bold enough to take any risk for their future
  • 40% are not aware if the risk they took is right or wrong
  • 42% do not use a budget for spending
  • Impulse purchase at least once a month is common
  • Only 13% of income is spent on savings & investment
  • 40% do not invest in stocks and bonds
  • 70% do not have proper retirement savings

Setting aside this survey information, it is now important to ask yourself about your financial situation. Are you going on the correct path to a loss-less financial future? How are you handling your finances? How good is your savings and investment?

Are you floating in income or drowning in loan?

Take this self-test to know your position

1) Which of the following best describes you:
a) I don’t care about future – do birds and animals worry about future
b) Instead of saving for future – I would like to spend
c) If I need something – I will buy it at any cost
d) Even if I need something – I would wait, plan and buy at a proper price

2) Your savings bank gives you 4% interest. If the inflation is at 8%, after a year what can you buy with the money in your account?
a) I don’t know
b) Can buy more than I can buy today
c) Can buy the same quantity as today
d) Can buy less than I can buy today

3) You have $100,000 and invest as cumulative deposit at 10% interest. After two years you will have:
a) I don’t know
b) $110,000
c) $120,000
d) More than $120,000

4) About Government bonds:
a) Never heard about it
b) Have recently read about it in magazines
c) These are debt securities released by the Central Government
d) Central Government releases these debt securities for market trade and have different maturity periods

5) If your car’s fuel efficiency is 12 km/lit and one litre of petrol costs $3, how far can you travel with the $33 in your purse without worry ?
a) Please don’t confuse me
b) Will ask my friend
c) 120 km
d) 132 km

6) About Investment
a) Don’t know what it is
b) I am earning to spend, why should I invest
c) Is what I do after finishing my expenses
d) Is a mandatory duty every month

7) Insurance for my family and myself
a) Is a waste expense
b) Planning to get soon
c) Have some at present – hope to get more
d) Have already

8) How is my expense?
a) Always exceeds my income
b) Always equals my income
c) Is always within my budget
d) Saving significantly every month after expenses

9) Loan…
a) Most of my earnings go to repay loan
b) If required, I will get loan without thinking about interest rate
c) When required, I will consult different banks to know about interest and other fees and avail loan only if it is within my repaying capacity
d) My expenses are planned and I don’t need a loan

10) About the debt caused by monthly use of credit card…
a) Will pay the minimum amount
b) Will pay half of it
c) Will convert large purchases as Instalments
d) Will pay the entire amount without delaying a single day

11) Share market, mutual funds, deposits, bonds, postal savings…
a) Haven’t heard about any of these
b) Have heard about these
c) Have started investing in these
d) Have been investing in these for a long time

12) If my salary is stopped suddenly…
a) Have to look for a job
b) Can sustain for the next months
c) I will get as much as 50% of my salary from my investments
d) I will get as much as my salary from my investments

Hope you have answered the above questions sincerely for your own sake.

Now for the scores…
Typical scores for the above responses are
Response (a) : 1 point
Response (b) : 2 points
Response (c) : 3 points
Response (d) : 4 points

Score Assessment

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