There are many questions that you could potentially ask in order to stress test your personal finances, however the following list should hopefully help you to work out how fit you are when it comes to managing your finances and preparing for those “what if” events that can crop up in life.
1. Do you have a list of your assets and liabilities?
2. Do you know what your take home pay is each week, fortnight or month?
3. Do you always have enough cash in your day-to-day or transaction account to last from one pay day to the next?
4. Do you know how much taxable income you earned last financial year?
5. Do you lodge your tax return on time each financial year?
6. Do you have a savings account that you regularly deposit into?
7. Do you know what your household expenses are?
8. Do you earn more than you spend each month?
9. Do you keep your receipts and check them off against your bank statement each month?
10. Do you have enough savings to fund your living costs for at least 3 months?
11. Do you pay your credit card off in full within the interest-free period?
12. Do you pay your household bills (e.g. electricity, internet, phone, school fees) on time?
13. Do you plan ahead for large expenses such as school fees, car registration, holidays or Christmas?
14. Do you know where your superannuation is invested and do you know how much super you have?
15. Do you know which super fund your employer is currently contributing into onto your behalf (if applicable)?
16. Is all your superannuation invested in a single super fund?
17. Do you make personal contributions to your superannuation?
18. Do you know the current interest rate on your home loan?
19. Using our loan repayment calculator, if interest rates where to rise by 3%pa, would you still be able to afford your mortgage repayments?
20. Do you regularly pay off more on your mortgage than the minimum required payment?
21. Do you have Income Protection insurance?
22. Do you have Trauma insurance?
23. Do you have Home and Contents insurance? Are the levels of cover sufficient?
24. Are your motor vehicles comprehensively insured?
25. Do you have a Will? Is it up to date? Does your Executor know where to find a copy of it?
If you answered mostly “YES” to the questions above then it’s likely that you are in control over your financial affairs, however it is important to review your situation and to seek professional advice periodically and when your personal or financial circumstances change.
In reviewing your situation, the first step may be to identify the areas that you were unsure of or answered “no” to above and look to put some measures in place.
If you answered mostly “NO” to the questions above, then you could benefit from seeking professional advice to help you develop healthy spending and debt management habits, understand your superannuation and insurances and put in place some simple yet important measures to ensure you can manage the “what if’s” in life.
This article is provided for general education purposes only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances.