Four questions for your Personal Finance Stress Test

Ask yourself:

Ignoring your mortgage for the moment, does more than 10 percent of your monthly take home pay go to debt payments – credit cards, home equity loans, student loans?

If it does, that’s high. Work to reduce it.

Now add you mortgage payment to that debt payment. Is the total more than 36 percent of your take-home pay?

That’s when the bells begin to go off. If you have stretched above that number a bit, because your income isn't all that great and home prices are high, your goal should be to get back down below that limit.

If you lost your job, how many months would you be able to live off your savings?

If you answer is, why didn’t you say weeks, this is an issue. Your goal should be to build up an emergency fund that would cover at least three months’ worth of expenses. Or more.

If your pay is cut by 10 percent or if you were forced to go on unpaid leave for a short time, would you still be able to cover your monthly bills?

If you answer is no, then it is clear you are not living on less than you make. And the people who win the savings game do. No matter what your income is, you should not be spending it all.

Do you have some questions of your own you think would fit on this list? Send them to me.

I'm writing a column about everyone doing a stress test on their own balance sheets. Should be interesting.