The Invest section of The Sunday Times published an article recently, encouraging readers to keep tabs on their cash flow. They also included a Financial Health Test in the article. As I don’t always read newspapers, I only found out about this when Brian Halim wrote about it on his blog, taking the test to to assess his financial situation and identify areas for improvement.

I thought that was quite interesting so I decided to take the test myself.

Financial Health Test

There are a total of 5 criteria used to test the how robust is one’s financial situation.

01 Total Debt Servicing Ratio

How to calculate: Monthly loan / monthly salary

Recommended: Below 60 percent. Ideally below 35 percent

Total debt servicing ratio (TDSR) refers to the portion of an individual’s gross monthly income that goes towards repaying the monthly debt obligations. Lenders typically use the borrower’s TDSR as one of the key factors to determine the maximum amount they are willing to lend without overexposing themselves