Having a solid understanding of personal finance can help us save more money and avoid debt.
Many of us like to think we are somewhat financially literate. But do you know more than a middle schooler? Let’s test your knowledge.
1. When working for an employer, a paycheck should ___.
Source: Freepik
- A) Be the total amount of hourly rate multiplied by the amount of hours worked
- B) The total amount minus some taxes
- C) Half the amount earned without subtracting tax
- D) None of the above
Answer: The total amount minus taxes
Source: Freepik
2. What is the average person’s biggest expense?
Source: Freepik
- A) Health care
- B) Food
- C) Transportation
- D) Housing
Answer: Housing
Source: Wikimedia
3. What is Interest?
Source: Freepik
- A) The amount earned by keeping money in a savings account
- B) An extra percentage paid back on top of a loan
- C) None of the above
- D) Both of the above
Answer: Both of the above
Source: Freepik
4. Which of these will not affect a person’s credit score?
Source: Freepik
- A) New credit
- B) Payment history
- C) Interest rates
- D) Credit mix
Answer: Interest rates
Source: Freepik
5. What is a bear market?
Source: Freepik
- A) When stock prices are dropping
- B) When stock prices are rising
- C) When investors are acting aggressively
- D) When investors pay no attention to the market
Answer: When stock prices are dropping
Source: Freepik
6. Which fee should not be charged to a checking account?
Source: Freepik
- A) ATM fee
- B) Overdraft fee
- C) Excessive withdrawal fee
- D) Minimum balance fee
Answer: Excessive withdrawal fee
Source: Freepik
7. Which statement about saving is true?
Source: Freepik
- A) Aim to save large amounts of money occasionally for your retirement
- B) Saving a consistent amount of money each month can help you prepare for the future
- C) Expenses can be considered savings if you get a discount on the item
- D) Don’t worry about saving
Answer: Saving a consistent amount of money each month can help you prepare for the future
Source: Freepik
8. What does FDIC insured mean?
Source: Freepik
- A) The back will pay customers $250,000 if they close down
- B) The federal government will repay deposits of up to $250,000 if the bank fails
- C) The bank offers insurance against fires and floods for up to $250,000
- D) The bank offers up $250,000 should a home get destroyed in an earthquake
Answer: The federal government will repay deposits of up to $250,000 if the bank fails
Source: Freepik
9. What is an insurance premium?
Source: Freepik
- A) The amount an insurance company pays out if a customer files a claim
- B) The amount a person pays out of their own pocket before they can claim insurance
- C) The monthly payment required to keep the insurance policy going
- D) A large down payment before the insurance policy begins
Answer: The monthly payment required to keep the insurance policy going
Source: Freepik
10. When choosing between two items to purchase, you should always ___.
Source: Freepik
- A) Choose the cheaper of the two
- B) Opt for the more expensive item
- C) Compare the benefits and costs of each item
- D) None of the above
Answer: Compare the benefits and costs of each item
Source: Freepik
11. If your income has doubled by 2025, but so has the cost of goods, how much will you be able to buy with your income?
Source: Freepik
- A) Less than today
- B) Twice as much as today
- C) The same as today
- D) Four times as much as today
Answer: The same as today
Source: Freepik
12. Which of the following will appear on a credit report?
Source: Freepik
- A) The last store you shopped at
- B) Your family history
- C) Your financial goals
- D) A late payment
Answer: The last store you shopped at
Source: Freepik
13. Which of these factors will lead to a financial problem?
Source: Freepik
- A) Categorizing your expenses into separate funds
- B) Overspending
- C) Understanding your positive and negative spending habits
- D) Taking values into account when determining goals
Answer: Overspending
Source: Freepik
14. Which of the following payment options allows a person to pre-establish the dollar value available for spending?
Source: Freepik
- A) Chip card
- B) Smart card
- C) Stored value card
- D) Debit card
Answer: Stored value card
Source: Freepik
15. If you invest $2,500 and earn 7% each year on the investment, how many years until you have $5,000?
Source: Freepik
- A) 0-5 years
- B) 5-15 years
- C) 15-45 years
- D) 45+ years
Answer: 5-15 years
Source: Freepik
