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Financial Literacy

Welcome to the Basic Financial Literacy Assessment! This 10-question, multiple-choice quiz is designed to test your understanding of essential personal finance topics, such as budgeting, saving, credit management, and investing. Whether you're a beginner or looking to refresh your knowledge, this assessment will help you gauge your financial literacy skills.

How It Works:

  • Answer all 10 multiple-choice questions.
  • Click the button below to begin.

Passing Score:
To pass, you need to score 80% or higher (8 out of 10 correct answers). Don’t worry if you don’t pass the first time—use this opportunity to learn and improve your financial knowledge!

Are you ready to test your financial savvy? Click the button below to start!

Ready to begin?
Click the button below to start your assessment!

Start

Question 1 of 10

What is a budget?

A

A list of your debts

B

A record of past purchases

C

A type of bank account

D

A tool for managing your money

Question 2 of 10

What does "pay yourself first" mean in financial planning?

A

Spend money on things you want

B

Save a portion of your income before spending

C

Pay your bills before saving

D

Treat yourself to a reward after budgeting

Question 3 of 10

What is compound interest?

A

Interest earned on both principal and previously earned interest

B

Interest calculated only on the initial principal

C

Interest that decreases over time

D

Interest charged for late payments

Question 4 of 10

Which of the following is an example of a fixed expense?

A

Groceries

B

Entertainment

C

Rent or mortgage

D

Clothing

Question 5 of 10

What is the purpose of an emergency fund?

A

To pay for vacations

B

To cover unexpected expenses

C

To invest in the stock market

D

To buy luxury items

Question 6 of 10

What does a credit score measure?

A

Your total income

B

Your ability to repay debts

C

The number of loans you have

D

How much you save monthly

Question 7 of 10

What is the best way to avoid paying interest on a credit card?

A

Make only the minimum payment each month

B

Pay off the entire balance each month

C

Use your credit card for small purchases only

D

Avoid using a credit card

Question 8 of 10

What is diversification in investing?

A

Putting all your money in one stock

B

Investing in only high-risk stocks

C

Spreading investments across various assets to reduce risk

D

Avoiding investments altogether

Question 9 of 10

What is the primary benefit of a 401(k) retirement account?

A

Employer matching contributions and tax advantages

B

Immediate access to funds anytime

C

High-interest rates compared to savings accounts

D

No contribution limits

Question 10 of 10

What is the term for the difference between your assets and liabilities?

A

Budget

B

Cash flow

C

Credit score

D

Net worth

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