How is your Financial Health?
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.—Warren Buffett
Nowadays, almost all we are conscious on our physical health but what about our Financial Health?
In reality, very few of us maintain our Financial health with proper Financial Planning. This Financial Planning includes allocation of your income in different heads in an optimum manner. You can fulfill almost all your dreams/goals (related to finance, of-course) with proper Financial planning without disturbing your daily life.
To check whether this financial planning is working fine or not, take this simple test. This quiz session will take only 5 minutes of your time but it will show you how Financially Fit you are.
Quiz on your Financial Health
A. My monthly Utility (Gas, Electricity, etc) are
1. I usually miss payment dates
2. I paid always at last minute
3. I pay the bills in any time over the whole month
4. The amount automatically gets debited from my bank account
B. My monthly expenditure mostly depends on
1. Anything which I find attractive. Why don’t I’ll spend when I earn so much!
2. Entertainment, movies, dining out.
3. personal necessities and something on luxury items and non-essential goods & services
4. Necessary expenses like utilities, grocery, rent, etc.
C. I am able to save
1. I can’t save . My income is enough to meet my living expenses only.
2. 10-25% of my income
3. 25-50% of my income
4. More than 50% of my income
D. I invest my monthly surplus
1. Never, I keep it on my bank account.
E. I invest mostly on
1. End of the Financial year with a objective to save taxes only
2. Direct Equity Investment
3. Investment in safe areas like FD/TD, recurring deposits, etc
4. Automated monthly SIP investment in Mutual Fund
F. I invest in Direct Equity market
1. Only when the equity market is in good condition and performing well
2. Never, I avoid such high risky investment avenue
3. Whenever I have extra cash in hand after making all other investment
4. With a long term objective to build my retirement Fund
G. My emergency Fund is well enough to meet
1. I have no emergency Fund
2. 1-2 months living expenses of my family
3. 3-5 months living expenses of my family
4. More than 6 months living expenses of my family
H. In case of any Medical emergency, all cost will be met from
1. I don’t know. If anything happen then I’ll manage somehow on that time
2. From my emergency Fund
3. Through the employer provided Health Insurance cover
4. I have a good Health Insurance for my entire family. All cost will be met from there only.
I. My Life Insurance Cover is
1. I don’t have any life-insurance
2. Less than my Annual salary
3. Around 1-2 times of my annual salary
4. More than 8 times of my annual salary
J. My Debt obligation force me to
1. I have to pay a high EMIs and as a result, I can’t make any investment
2. Pay more than 40-50% of my monthly income as repayment of debt
3. Pay less than 30% of my monthly income as repayment
4. Yeah! I have no debt.
K. My credit card bills are
1. I can’t pay the full amount on every month and it rolled over more than 6 times a year
2. Rolled over more than 2-3 times a year
3. Rarely rolled over. May be 1 time in a years
4. Never rolled over. I pay my bills within due date.
L. My will
1. I don’t have any will and haven’t thought about it yet
2. I’ll do it when I’ll be near to my retirement
3. Already written some years back and don’t think on it anymore
4. I update my written will after every 5 years or after anything major life changes.
Score Report Card
Now for the calculation part, take the answer no of every question as it’s point. Like : If you choose answer no 1 of any question then your point for that question will be marked as 1. Now make a total of all the points and find out your situation from the below mentioned explanation:-
If your score card is less than 24
Your Financial stability is in danger. You really need a lot of change in your money matters to give your family a secure Financial Future.
If your Score is 24-30
Your Financial fitness is overall acceptable but you need to change your approach in some of your money related activities. You may be in Financial risk if some sudden financial need is come into place
If your score is 30-36
Your Financial health is good although there is lot of scope to improve it.
More than 36 points
Your Financial health is great. Keep it up and have a secure Financial Future.
Don’t get frustrated if you are not in a good Financial Zone. Try to manage your personal finance as per your planning. You can get good guide from this article ( Personal Finance Guidance) on how to manage your personal finance to improve your Financial health.
What’s more! Make your personal finance plan sitting with your family members and have a Safe & Secure Future.