Click here to find out if you are money smart. This quiz includes questions from FINRA's National Financial Capability Study.
1) Which activity can pose the greatest threat to your wallet?
Getting a latte at Starbucks every dayBorrowing money for a car you need to get to work
Spending without a plan
Spending without a plan can put you in a world of hurt. Not correctly managing your finances can cause you to overdraw your accounts, go over your credit limit, and rack up excessive amounts of debt.
2) If you apply for a store credit card, how do they decide if they approve you—or turn you down—on the spot?
They make sure you look good in their clothesThey check out your credit score
They make sure you have spent a set amount of money at their store
Many stores are set up to access your credit score right at the register. If you have a high score, you are usually given a credit line right on the spot. If you have a low score, you will be denied a credit line.
3) What is considered a good FICO credit score?
In the mid to high 500'sIn the mid to high 600's
In the mid to high 700's
According to myfico.com, you want a credit score in the mid to high 700s in order to qualify for the best interest rates. The national average score is around 690.
4) What does a phisher want?
Your personal and financial informationA romantic date
Your academic records
Phishers are email scam artists who want to steal your confidential personal information. They use the information to make purchases or borrow money in your name, or access your bank account.
5) If someone steals your credit card and uses it, how much could you end up owing?
$50$500
The total bill
The Truth in Lending law limits your liability to $50 if your credit card is stolen. On the other hand, you could owe $500 if thieves get their hands on your debit card.
6) What's the main difference between a Roth Individual Retirement Account (IRA) and Traditional IRA?
Roth IRAs include stocks and Traditional IRAs do notWith Roth IRAs, you pay taxes before you put the money in the account - With Traditional IRAs, you pay taxes when you withdraw the money in retirement
Both Roth IRAs and Traditional IRAs are taxed
With Roth IRAs, you pay taxes before you put the money in the account. With Traditional IRAs, you pay taxes when you withdraw the money in retirement. Both types of accounts can include stocks. Funds in both types of accounts grow tax-free.
7) Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?
More than it does todayExactly the same
Less than today
Less than today. Watch out for inflation!
8) How much money should you keep in your emergency fund?
3% of your current salaryThe equivalent of 3 to 6 months worth of living expenses
Nothing—just use your credit card in case of emergencies
Experts recommend being prepared for unexpected expenses and life events by saving up at least 3 to 6 months worth of living expenses for emergencies.
9) How can you tell if your identity has been stolen?
You receive bills for things you never purchasedYou receive lots of spam email
You receive mail addressed to someone else
Receiving bills or statements for things you never purchased or credit cards for which you never applied may be a sign of identity theft.
10) If you're trying to build good credit, what is the most important thing you can do?
Throw away your credit cards and don’t take out any loansMaintain a balance on your credit cards and pay the minimum every month
Pay your bills on time
Paying your bills on time, including your rent, student loans, and credit cards, is the single most important thing you can do to establish good credit.
11) Your credit score can affect your ability to:
Lease an apartmentGet a good rate on auto insurance
Both of the above
Your credit score can affect your ability to get a loan, an apartment, or even a job. It can also affect the interest rate you pay to borrow or the premiums you pay for insurance.
12) If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship?
RiseFall
Stay the same
Fall. Bond prices and interest rates move in opposite directions.
13) True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.
TrueFalse
True. The shorter the loan term, the less interest you pay.
14) According to the US Department of Labor, what percentage of your preretirement yearly income do you need to save to maintain your standard of living when you stop working?
70%60%
50%
Retirement is expensive. Experts estimate that you will need about 70 percent of your preretirement income – lower earners, 90 percent or more – to maintain your standard of living when you stop working.
15) True or false: Buying a single company's stock usually provides a safer return than a stock mutual fund.
TrueFalse
False. Diversification means reducing risk by investing in a variety of assets. Mutual funds allow you to spread the risk of losing money among different investment tools.
16) What are your odds of winning a six-number lottery?
1 in a million1 in 5 million
1 in 10 million
Your odds of winning the lottery are so low that many mathematicians call the lottery a tax for people who are bad a math.
17) According to the US Department of Labor, how much are social security benefits?
Equal to about 40 percent of what you earned before retirementEqual to about 50 percent of what you earned before retirement
Equal to about 60 percent of what you earned before retirement
Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement. Another reason to save as much as you can for retirement. Remember, you need about 70% of what you earned before retirement to maintain your standard of living.
18) How much money does the average American save each year by brown bagging their lunch?
$500$1,000
$1,500
$1,500. Be good to yourself. Brown bagging is healthier and cheaper than grabbing fast food.
19) People in which of the following careers typically can qualify for student loan forgiveness?
TeachersFirefighters
Both of the above
Both of the above. Public service workers can qualify for the Public Service Loan Forgiveness program. Under this program, borrowers make 120 payments on their student loans, then their remaining balance is dropped. People who work for the government or for non-profit organizations can qualify.
20) What can happen if you fill out your W4 incorrectly?
The IRS will hunt you downYou can end up withholding too much or prepaying too little tax
Nothing, your tax accountant can figure it out
If you fill out your W4 incorrectly, you could end up having too little, or too much, tax withheld. Too little, and you’ll owe money when you file your taxes. Too much, and you've given the IRS an interest-free loan with money that could have been earning you money in an investment account.
FINAL RESULTS
0-10 Correct
You need to expand your knowledge of financial matters.
Return to the Money Smart Nebraska website.
FINAL RESULTS
10-17 Correct
You are starting on the path to financial success, but you lack some important financial knowledge.
Return to the Money Smart Nebraska website.
FINAL RESULTS
17-20 Correct
Congratulations! You are on the path to financial success.
Return to the Money Smart Nebraska website.