Your spending habits, your savings patterns and your overall goals are important parts of competently managing your personal finances. This test can provide you with an indication as to whether you need some help, or whether you're across this very important aspect of your life. (The answers are listed at the end of this article.)

Question #1. Do you know what "living beyond your means" really means?

Question #2. How can paying only the minimum credit card payment each month compromise your financial future ?

Question #3. What do most people use, to successfully get their finances back on track?

Question #4. Which financial goals are most important?

Question #5. Is there a problem if you spend all your income each month?

Question #6. How much should I be setting aside each month for savings and emergencies?

Question #7. What bills should be paid as a priority?

Were these questions simple for you to answer? Did you answer them correctly? You can check to compare your responses with the answers below.

Answer to Question #1. "Living beyond your means" means spending to live, using more funds than your income generates. It means you are reliant, to some extent, on external borrowings just to live. Living this way can condemn you life long poverty, if this situation is not addressed.

Answer to Question #2. By paying only the minimum from your credit card statement each month you quickly begin paying interest on the interest and the spiral of debt can get out of control. You must live within your means. Pay cash and pay down that credit card debt as quickly as possible. Don't add any more debts.

Answer to Question #3. Preparing and sticking to, a correctly set up personal budget, is the most successful way to get your personal finances in order. Please don't lose interest now. Preparing your own budget is a simple task, Honestly. There are many resources available on the Internet to help you quickly make a start. You're not left on your own to work this out.

Answer to Question #4. These are the financial goals you need to set, in this order: a) Firstly, commit to a goal of paying down the credit card debt quickly. For instance, I will pay $3,000 off the credit card debt in the next 6 months. Modify your living so you can put more money to the credit card repayments. Be tough on yourself. Commit also to only paying cash for everything, from now on. b) Secondly, set a savings target. A budget will show you how much you need to put aside for emergencies and your savings nest egg. c) Thirdly, commit to being debt free. This will transform your way of life. Work out what is the minimum you need to live comfortably, and see how much better your life would be if there was no money being applied to debts each month. It's like giving yourself a pay raise.

Answer to Question #5. Life has risks. Bills can arrive when you least expect them? Electrical items can break down, the car can need major repairs. Will you pay for them with money you don't have? Your credit card? Then how will you pay that bill?

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