Do you know where your money is going each month? Our finance whiz, Rubina Ahmed-Haq, puts your spending smarts to the test.
- After rent or mortgage, what is the next highest monthly expense for North Americans?
a. cable/internet/cell
b. eating out/groceries
c. transportation
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C. Transportation.
On average, we spend $800 a month getting from A to B. This includes vehicle maintenance, insurance, gas, parking, etc. You'll save a significant amount of money by using public transit twice a week and keeping your car parked in your garage.
- How much of your monthly income should be put into long-term savings?
a. 10 percent
b. 15 percent
c. 20 percent
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A. 10 percent.
If you can put away 10 percent of your monthly income into savings, you will most likely not have to worry about your long-term financial health. Think of it as an investment in yourself.
- What expense category do monthly insurance premiums fall under?
a. variable expense
b. sunk cost
c. luxury item
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B. Sunk cost.
These are costs we pay whether we use the service or not. Sunk costs include taxes, gym membership, rent, mortgage and car payments. Don't be a slave to your sunk costs! Evaluate your current lifestyle and call providers to negotiate better deals.
- You have an extra $300 at the end of the month after paying yourself and all of your bills. What should you do?
a. Deposit it in long-term savings
b. Spend it! You deserve a treat.
c. Put it towards your debt.
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C. Debt repayment.
It's not sexy but it's the truth. Any money you pay above and beyond minimum payments goes directly against your principal. Over time, that $300 will actually represent a larger amount, and you will be paying less interest on your whole loan, which means you'll pay it off sooner.
- You own a new car. How much should you set aside each month for vehicle maintenance?
a. $0
b. $50
c. $100
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C. $100.
The average cost of general maintenance on a family car is about $600 a year, including oil changes, tune-ups and tire rotations. Putting away $50 on top of that will ensure that you have enough money to pay for an emergency roadside breakdown or other unfortunate accidents.
