8 Questions You Should be Able to Answer Now!

cheers 839865 1280
We'd love you to SHARE this blog post!
  • 2

Being aware financially is important. You can’t win a battle when you don’t understand the players or the rules. While we all know some of the basics about our financial situation, our salary and regular pay amount for example, too many of us are ignoring some of the fundamental facts in trying to figure out how to proceed. Are you one of them?

This article is going to overview eight questions that will get you on track to being more financially aware in as short a time as possible. You should be able to answer these questions any day of the week, and if you don’t, you should be figuring out where your gaps are and filling them in for the next day!

Ready to see how much you know? Here we go.

Question 1: How far in debt am I?

On any given day, you should know exactly how far in debt you are. This should include all debts, from credit card balances to loans and mortgages. Regularly review your statements to ensure you are up to date on your information, and consider periodically checking web balances so nothing surprises you at the end of the month.

Question 2: How much do I have saved?

A lot of us should think about how much is in our savings account, and we shouldn’t. While we’re often familiar with our chequing, savings is an overlooked balance where people should be aware of what’s gone in, but all too often are not. Try to keep up on this at the same time of the week you’re checking your debt balances.

Question 3: What’s my credit rating?

People often wait to check credit ratings until they’re applying for a loan or a job that requires it. This is a mistake. By then you need a good credit rating, and it will take months to adjust if you don’t have one.

Try ordering a free credit report periodically, or paying for one if your bank doesn’t offer a free check. As a bonus, this vigilance will also help protect you from the perils of identity theft.

Question 4: How much money would I need to survive the next three months?

Experts agree that a solid emergency fund will include between 3-6 months of money squirrelled away for safe keeping. But do you know how much that should be in your case? How about for just the three months? Knowing how much you need is a good start to planning to make sure it’s there, just in case the worst happens.

 Question 5: How much do I have saved for retirement?

Just like thinking about your plans for how much you’d need to survive the next three months, it is also important to be able to figure out how much you have saved away – and how much more you will need – for your retirement fund. This is another situation where people often don’t consider it until it’s too late to do anything about it, and if you start planning early it doesn’t have to be a bank breaker to put away a little bit here and there.

Question 6: What do I owe in taxes?

A lot of people don’t think about tax time until it comes up, and while most of us collect a refund, some of us will be finding out we’re stuck with a bill. The best way to avoid this nasty surprise is to keep track of what you’ll owe come tax time by reviewing your pay slips. When you get a job you’ll be asked if you want to claim the tax free threshold. Consider answering ‘no’ and paying tax on every dollar you earn. That way you’ll know you’ll have a nice tax return coming to you at tax time and you can pay down any debts you might have.

Question 7: What’s my net worth?

You’d be surprised how many people don’t know how net worth is calculated. Your net worth is a combination of all your assets (properties, savings accounts, cash, investments, and more) minus your debts (loans, mortgages, credit card and store card/Afterpay balances).

While you don’t need to have an exact figure in your head always, it might be a good idea to start keeping track of your ball park net worth. This will give you an idea of how you’re doing overall, as well as the impact that credit is having on your life and where to go from here to improve your net worth.

For an easy way to keep track of your finances try our Financial Guidance E-Course – we know you’ll love it and it’s FREE!

Question 8: Is my estate prepared to survive after death?

Though we won’t live forever, our financial legacy can leave an impact on loved ones. It’s important to make sure that your estate affairs are in order, just in case the worst should happen. Nobody likes to think about something happening to them, and hopefully it won’t for a very long time, but at some point, we all need a will and it should be kept current with who we want to receive our assets in the event of our passing.

If you can answer these eight questions, you’re in good financial shape – or on your way to it. Don’t panic if you didn’t have all eight just yet, just take the afternoon and crunch some numbers so you too can be prepared for the future!

Let us know how you went on these eight questions in the comments, we’d love to hear it.

    Ready to have fun while still saving your money?

    Sign Up for free money tips to help you get what you want in life.