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Spending more than you should? Take this quiz

Wealth Special
Nov 06, 2008 at 11:14am IST

Today, it’s easy to get swayed by flashy advertisements and buy products you don’t need.

Thanks to the EMI culture, we can make any purchase, expensive or cheap. And in the bargain, all our savings and budgeting plans take a backseat.

So, how do you know if you are saving enough? And whether your budget is in tune with your financial goals?

YES OR NO: Do you have regular nightmares of losing your job?

Take this quiz to find out if you are a spendthrift or if you are on the right track.

Answer in a ‘Yes’ or a ‘No’ for each of the following questions:

1. Have your cheques been bouncing off late, due to insufficient funds in your bank account?

2. Have you faced a situation where you want to take a loan but the bank is hesitant because your credit rating is poor?

3. Are you saving less than 15 per cent of your monthly salary?

4. Are you buying most things using your credit card and revolving the balance month after month?

5. Do you have four credit cards and are borrowing from one card to pay the outstanding balance on the other three?

6. Are more than 30 per cent of your monthly earnings going towards EMIs on loans?

7. Do you have regular nightmares of losing your job?

8. Do you have a tough time arranging for funds for even small things, for example, having to replace your car tyres?

9. Do you visit your parents for a 10-day vacation so that you can save some living expenses?

10. Have you dipped into your parents' kitty for your car purchase or for your marriage expenses?

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If most or all of your answers are ‘Yes’:

You are definitely spending more than what you should. Your financial health needs immediate attention. You can take corrective measures such as:

1. Make a monthly budget and stick to it.

2. Cut down on your borrowings.

3. Take an insurance cover to provide for contingencies.

4. Keep an amount aside for emergencies

If most or all of your answers are ‘No’

Congratulations. You have managed to keep a fine balance between your earning and spending.

Here are some tips on investing and managing your money:

1. Invest based on your risk profile.

2. Diversify your investments across assets, in order to keep a balance between risk and returns.

3. Plan your retirement

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