How Money Savvy Are You? Test Your Smarts

1. You are expecting your first paycheck on Friday. You worked 10 hours for $10 per hour, and you hope you will be able to buy a $100 ticket to a Taylor Swift concert. What will your paycheck most closely look like?

Correct!

Wrong!

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2. Unless you have a lot of high-interest debt to pay, or are born into the Kardashian family, when should you start saving for your retirement?

As a small child.

As a young adult.

Once the grey starts to appear.

Why start?

Correct!

Wrong!

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3. If Beyoncé wants to invest the money she makes on Lemonade, which of these investments will double her money?

Bonds paying eight percent interest for nine years.

Real estate paying 10 percent interest for four years.

Lend it to Kanye – who promises to pay her double – for his business.

Stocks paying a four percent dividend for 15 years.

Correct!

Wrong!

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4. If you forgot to pay your credit card bill of $100 last month, and charged another $50 on it this month, what will your next bill most likely include?

The previous balance due plus new charges.

The prior balance due, all new charges, and a late fee.

The prior balance due, all new charges, and interest.

The prior payment due, this months payment due, plus a late fee.

Correct!

Wrong!

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5. Three of these items are examples of fixed monthly expenses. Which one is NOT an example of a fixed monthly expense?

Movie tickets

Student loan payment

Rent

Cell phone bill

Correct!

Wrong!

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6. Three of these things are examples of variable monthly expenses. Which one is NOT?

Groceries

Hair cuts/manicures

Gym membership

Clothing

Correct!

Wrong!

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7. What does it mean to “pay yourself first” (PYF)?

Whenever you are paid or receive money as a gift, put a portion away into savings immediately before you decide how you might spend the rest.

When your family receives money, you take your share first.

When you run a business, pay yourself before you pay your employees.

When you get paid, pay all of your obligations and save whatever is left.

Correct!

Wrong!

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8. The amount of US currency in circulation ($1.6 Trillion) is

Less than the sum of all checking and savings accounts in banks in the US

Equal to the sum of all checking and savings accounts in banks in the US

More than the sum of all checking and savings accounts in banks in the US

Double the sum of all checking and savings accounts in banks in the US

Correct!

Wrong!

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9. What is the difference between a debit card and a credit card?

There is no difference.

When you use a debit card, money comes out of your bank account right away. You pay credit card charges later, usually within 25 days of getting your bill.

Debit cards are only issued by banks, credit cards only by credit card companies.

You can get cash from an ATM with your debit card, but not with a credit card.

Correct!

Wrong!

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10. Which activity would most likely provide the greatest increase your human capital?

Going to college.

Working out regularly at the gym.

Learning to speak Klingon.

Improving your wardrobe.

Correct!

Wrong!

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11. If you invest $1,000 at two percent interest compounded annually, how much will you have at the end of 5 years?

$1,100

Less than $1,100

More than $1,100

More than $1500

Correct!

Wrong!

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12. Which statement comparing car and student loans is NOT true?

Car loans have the car as collateral – it can be repossessed if you don’t pay, but student loans have no collateral.

You need collateral for both car loans and student loans.

You need decent credit for a car loan, but not for a Federal student loan.

Typical repayment for a car loan is two to six years, but 10 years for federal student loans.

Correct!

Wrong!

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