How often do you give yourself a self-test in finance, if ever? Well, here are a few questions for you to mull over and figure out the answers.

### Question 1

Your monthly net income is RM2100. Your home loan is RM900 per month and car loan is RM500 per month. You are also making a monthly payment of RM300 towards settling a huge outstanding credit card debt. What is your debt payment-to-income ratio?

The house loan payment is not included as it is a long-term liability. The general rule-of-thumb is “do not spend more than 20 percent of your net income on consumer credit payments.” A lower percentage (e.g. 15 percent) is better and safer. If your take-home pay is RM3000, your consumer credit payments should be around RM450 per month only (15 percent).

### Question 2

You bought an electrical item with a RM60 down payment. You have to make subsequent payments of RM70 for 36 months. What is your total cost for buying the electrical item?
Answer: RM60 + (RM70 x 36) = RM2, 580

### Question 3

You purchase a packaged food (185 g) for RM4.85. Then you purchase a similar product (300 g) of a different brand for RM6.00. Which product is cheaper?
1st product: RM4.85 ÷ 185 = 2.62 cents per gram
2nd product: RM6.00 ÷ 300 = 2 cents per gram
The second product is slightly cheaper.

### Question 4

You are single and your take-home pay is RM3250 per month. You calculated your monthly expenses to be RM2150. How much should you save for an emergency fund?
Monthly expenses x 3 months = RM2150 x 3 = RM6450
This is the minimum amount to save which you can increase as you see fit.

### Question 5

How much interest would you earn if you deposited RM5000 at 6 percent for 30 months?
Interest = RM5000 x 0.06 x 2.5 years (30 months)
= RM750

Jacquelyn is the co-author of the books “Teaching Your Kids About Money” and “Top 93 Personal Finance FAQs in Malaysia” with KC Lau. Jacquelyn is the pseudonym used by Amy Sipagal.

### 3 replies to "Finance: A Self-Test"

• Pei Ling

i do calculate as Q. 3 when i going to buy toothpaste or toothbrush or other groceries in promotion.
haha……

• […] This is the second article on financial self-testing to gauge your general knowledge on personal financial management. You can find the first posting under the title “Finance: A Self-Test.” […]

• leram sedin

very useful