Are You Penny Smart?

 

1. Your company provides you with a medical insurance cover of `1 lakh per year. You:
A. Wonder why you need medical insurance. You are 26 and don’t foresee anything drastic happening in the near future.
B. Are happy the company take the policy—you’d have done it yourself otherwise.
C. Wonder if `1 lakh is enough cover for a person and her family. You wonder if you need to take another policy or enhance the amount on this one.

2. You are due for a huge bonus at the end of the year. You:
A. Are already anticipating what indulgence you can spend it on.
B. Think of putting the down payment on a car, and then the rest can be spent on having a good time. Investment before pleasure is a good idea.
C. Are going to split the money and put it away in securities and mutual funds. There is no such thing as too much investment.

3. Your company has not told you about your tax liability at the beginning of the financial year. You:
A. Are not bothered about this tax thing. Let the end of the year come and you will see what can be done.
B. Have a rough idea how much tax you will pay and ask your office to cut a flat amount every month at source.
C. Are going to see the tax planner right now; you will need to know how to handle investments so that you can save on your tax.

4. Your friend tells you that you should buy life insurance. You:
A. Ask her what good life insurance will do when you are not around to enjoy it.
B. Tell her you are aware of it and have a policy since it will help you save on tax.
C. You proudly show her the three policies you have made, explaining why life insurance is more than just a tax benefit, and how your family is covered should anything happen to you.

Mostly As You have no clue how to handle money. You have not even planned for the end of the year, let alone an uncertain future. It is high time you sat with an expert who can teach you how to plan your finances.

Mostly Bs You understand that savings and investments are good for you, although you are only human and like to splurge now and then. But every once in a while, it is good to take stock of what you are doing with your money and see whether you can change your investments.

Mostly Cs You could give lessons to others who need financial advice. You can afford to chill a bit and buy a car simply because it looks good and because it is good for your soul to splurge a bit now and then.