This test was extracted from an straits time article.
https://www.straitstimes.com/business/invest/are-your-finances-healthy-take-test-to-find-out
Let old turtle take the basic financial check of my family expense to see whether my family financial is healthy or unhealthy.
Excited... let's start now!
- TOTAL DEBT SERVICING RATION (MONTHLY LOAN/SALARY)
Turtle family: 0% (Nil loan)
Verdict: Pass
(Recommended: Below 60%. Should aim for below 35%.)
- HOUSEHOLD LIQUIDITY RATIO (TOTAL CASH SAVINGS/TOTAL MONTHLY COMMITMENT)
Turtle family: 8.2 months
Verdict: Marginal Pass
(Recommended: More than 6 months.)
- CASH TO NET WORTH RATIO (CASH/ASSET - DEBT)
Turtle family: 261%
Verdict: Pass
(Recommended: More than 15% means) FYI, below 15% means you are asset rich but cash poor.)
- SAVINGS RATIO (MONTHLY SAVINGS/SALARY)
Turtle family: 51%
Verdict: Pass
(Recommended: It is prudent to save at least 10% of monthly pay)
- DEBT TO ASSET RATIO (TOTAL DEBT/TOTAL ASSET)
Turtle family: 0% (Nil loan)
Verdict: Pass
(Recommended: Below 50%. Should reduce loan exposure where possible)
Conclusion: Turtle family passed all 5 basic tests to evaluate our financial health.
These are really basic ratios and it doesn't take into...