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Are your finances really stressed out? Take this test
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?
Now add you mortgage payment to that debt payment. Is the total more than 36 percent of your take-home pay?
If you lost your job, how many months would you be able to live off your savings?
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?
Tomorrow: I'll answer the questions.
Tell me how you do on this test.
And send me your suggestions for other questions. I'm writing a column about everyone doing a stress test on their own finances Should be interesting.
Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
Comments
1.0%
2. 19%
3. 1 year
4. yes
Posted by: sh | May 12, 2009 1:34 PM
1. Does that mean minimum payments or actual payments? If minimum payments only, then = 14.5%
2. 35.5%
3. 2 months maybe
4. yes, but define 'short' - again 2-3 months is about all I could handle right now.
Most of my debt came from a property investment that didn't go well. That and student loans. I don't have a car payment either, so I am very focused on paying down debt, and should have all credit card debt paid in 2 years by following a strict budget to maximize the amount I can pay on credit cards. Strict doesn't mean NO VACTIONS either.
Posted by: the OS | May 13, 2009 9:52 AM
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?
Yes, but I put EVERYTHING on my credit card. 5% back on gas, 1% on everything else, and I pay it off each month, so no interest payments.
Now add you mortgage payment to that debt payment. Is the total more than 36 percent of your take-home pay?
No mortgage payment. I paid off the 15 year mortgage last year. But adding credit card payments to property taxes and insurance and the IRS, it gets to over 70% of our income.
If you lost your job, how many months would you be able to live off your savings?
18 months, based on current spending levels, 24 months if we went cheap.
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?
Yes, as long as the cut was under 30%, we would be fine.
Posted by: Catwoman | May 20, 2009 1:27 PM