Can you manage your money on your own? Take this test to find out

Take this test to find out if you can manage your money on your own.

1.How much of your income do you save every month?
A Up to 25%
B 10-20%
C Less than 10%
D No savings after expenses

2.How much is the average balance in your savings bank account?
A Less than Rs 1 lakh
B Rs 1-2 lakh
C Rs 2-3 lakh
D Over Rs 3 lakh

3.In an emergency, you will:
A Utilise your contingency fund
B Liquidate some assets
C Use your credit cards
D Take a loan
4.Do you know the asset allocation of your portfolio?
A Yes, and rebalance every year to maintain it
B Yes, but have not fixed an asset mix C Have a vague idea but never checked
D Have no idea of portfolio’s asset mix

5.Which of these statements is true for you?
A Have set financial goals and started saving
B Started saving but not defined goals
C Have defined goals but not started saving
D Have not set goals nor started saving

6.Do you understand the investments you have made?
A Fully understand each product I have bought
B Except a few, I understand most products
C Can understand only a few investments
D Financial matters too complex for me

7.How much is your life insurance cover?
A More than five times my annual income
B About 1-2 times my annual income
C Less than my annual income
D No life insurance cover

8.How much is your health insurance cover?
A Over Rs 5 lakh cover for self and family
B Rs 2-3 lakh cover for self and family
C Group cover from employer
D No health insurance cover

9.Have you ever been denied a loan?
A No, I have never been denied a loan
B Lender asked for some clarifications
C Lender refused at first but later agreed
D Yes, lender has refused to give loan

Give yourself points on the following basis
A 4 Points
B 3 Points
C 2 Points
D 1 Points

Then add up the score to know where you stand.

Over 30 Points: DIY star
Congratulations, you have it in you to manage money on your own. By cutting out the intermediaries, you can save big on commissions and insulate yourself against mis-selling.

24-30 Points: Getting there
You have a fair idea of financial products. With a little more research and reading up, you can manage your investments yourself.

16-23 Points: Need guidance
Your knowledge of investments and finance is not very deep. It will be better if you take guidance from experts instead of managing your money yourself.

Less than 15 Points: Seek help
You are obviously not in a position to manage your money yourself. A qualified expert can put your finances back on track. You will gain much more than the fees he will charge.

Also Read: Can you be a Do-It-Yourself investor?