Can you manage your money? A personal finance quiz.

Quiz results are tabulated by assigning a score to each answer and then adding the scores up. The best right answer gets 5 points. The worst answer, 1 point.  Your total score determines which of our three categories you fall into: Financial Whiz, Financially Competent, or Financial Beginner.

Disagree with the results? Take the quiz again!

Your results


Congratulations! Your score is in the bottom third with 75 or fewer points. You've taken an initial step toward understanding how to manage your money. You're also probably headed toward a fiscal disaster zone. You may already have a passing familiarity with debt collection agencies and missed credit card payments. You might consider taking a personal finance class, picking up a book by Suze Orman, Dave Ramsey, or even “Investing for Dummies” (all sources used for this quiz. Scroll down for contact information). We urge you to become a regular reader of the business page, then take the quiz again. But if you really want to see the answers, scroll to the bottom of this page.


Congratulations! Your score puts you in the middle third with 76-150 points. You’re no savant, but at least you’re not stashing cash in your mattress, and you clearly understand the value of compound interest. But you might consider brushing up on a few areas. We urge you to become a regular reader of the business page and then take the quiz again. But if you really want to see the answers, scroll to the bottom of this page.


Congratulations! Your score is in the top third, with 151-225 points. Financial gurus Suze Orman and Dave Ramsey should be taking notes from you. Expect a call asking for advice from Carlos Slim (No. 1 on the Forbes 2011 billionaires list) any day now. Scroll down for contact information). We urge you to become a regular reader of the business page, then take the quiz again. If you want to see the scoring for the answers to the quiz, scroll to the bottom of this page.

Your responses

Question Your Response
Typically, the lowest interest rate on a loan comes from a ...

Pawn shop (1)

Savings bank or credit union (5)

Commercial bank (4)

Credit card (2)

Which of the following is the most “liquid” investment?

Mineral water (1)

Stocks (2)

Certificate of Deposit (4)

Money market mutual fund (5)

When would you most likely use the P/E (price-earnings) ratio?

When evaluating whether to buy or sell a stock (5)

When evaluating the cost of groceries (1)

When evaluating whether to buy or sell real estate (2)

When evaluating a company's management (4)

What are capital gains?

When Congress tilts the investment rules to favor the rich (2)

A loss resulting from the sale of an investment such as stocks or real estate (4)

An increase in weight or girth among members of Congress (1)

A profit resulting from the sale of an investment such as stocks or real estate (5)

If you file for bankruptcy, in most cases, that means you don’t have to repay your Sallie Mae (federal) student loans. True or false?

True (1)

False (5)

What’s the best way to calculate if you have too much credit card debt?

You never have enough money at the end of the month to pay more than the minimum balance. (4)

Your credit limit has been reached on 3 out of 5 cards (2)

The total of your monthly credit card debt is more than 15 percent of your take home pay (5)

You no longer receive offers in the mail from credit card companies to open a new account (1)

What does IPO stand for?

It’s Probably Overpriced (4)

Ideal Public Ownership (2)

Initial Public Offering (5)

Industrial Production Officer (1)

True or false? Over the full length of a $200,000 home mortgage, you will spend less money on a 30-year fixed-rate mortgage at 5.5 percent than on a 15-year fixed-rate mortgage at 6 percent.

True. The mortgage interest rate on the 15-year fixed loan is higher than the interest rate on the 30-year fixed rate mortgage. (2)

False. Your 30-year loan will cost you $105,000 more in interest payments over the life of the loan. During the first five years, however, the interest you’ll pay will be almost the same. (4)

What’s the difference between a no-load mutual fund and a load mutual fund?

No-load funds don’t invest in companies that make vehicles that carry heavy objects. (1)

Load funds have a management fee of 5 percent or more. (4)

No-load funds aren’t loaded up with high-risk stocks or bonds. (2)

Load funds charge a fee and/or a sales commission on investment transactions. (5)

Your creditworthiness is based on your FICO (Fair Isaac Corp.) score. Which one of the following is true?

Late payment of your mortgage will cause your FICO score to increase. (1)

Your payment history is the most important of the five main FICO scoring elements (5)

If you increase your credit limit (but don't use it) on a credit card, that will cause a long-term drop in your FICO score (4)

The more types of loans (credit card, mortgage, auto) you have, the lower your FICO score (2)

When it comes to organizing your portfolio, what's the most important investment principle?

Diversify, diversify, diversify (5)

Location, location, location (2)

Save, save, save (4)

Rent to own, rent to own, rent to own (1)

Which one of the following is the best indicator of how much your money is earning in a bank or other financial institution?

Annual Percentage Rate (APR) (4)

Annual Percentage Yield (APY) (5)

Annual Savings Return (ASR) (2)

None of the Above (NOB) (1)

If your employer offers a 401(k) or 403(b) retirement plan, with matching contributions, you should:

Get a Roth IRA instead of a 401(k) (4)

Contribute to the 401(k) in amounts up to at least the matching contribution amount (5)

Avoid 401(k) contributions until you are at least 50 years old (2)

Put your retirement savings in a certificate of deposit (1)

Congratulations, you just got a 10 percent raise. Most financial planners would recommend that you:

Buy a new car now while you can qualify for a low rate on an auto loan. (4)

Put all of it into paying down your debt (or adding to your savings). (5)

Spend it on your spouse or family because you’ve been spending too much time at the office. (2)

Spend it on a vacation, you’ve earned it. (1)

If the annual inflation rate is 3 percent, and your savings are invested in a one-year certificate of deposit offering 2 percent interest, which answer is true?

You’ll lose 1 percent of the value of your money. (5)

You’ll earned a 5 percent return on your investment. (1)

If you had a summer job at a camp in Colorado, and a part-time job while going to college in Wisconsin, do you have to file state tax returns for both states?

Yes, you must file a tax return in every state where you made income, unless you are in the US military. US military personnel are only responsible for taxes in the state where they have residency. (5)

In most states, if you make less than $10,000 per year you are not required to file an income tax return. (4)

No, double indemnity means that you don’t have to pay taxes in two states. (1)

No, you file in Wisconsin only. You have to add the income from the Colorado job to your total income in Wisconsin. (2)

What is the annual percentage rate on a credit card?

The percentage of your salary that goes to the credit card company each year. (1)

The maximum interest rate charged by the credit card company during the next 12 months. (3)

An estimate of the interest rate over the course of 12 months. (5)

When you set up a checking or savings account, you should ask about:

Minimum deposit for free checking (4)

Restrictions on no-fee accounts (2)

The number and location of ATMs (1)

All of the above (5)

If you’ve paid off your home mortgage, and you retire at age 65, most financial planners say you should be able to live on:

50 percent of your annual pre-retirement income. (3)

70 percent of your annual pre-retirement income. (5)

30 percent of your annual pre-retirement income. (1)

True or false? If you pay off your credit card balance each month, the annual percentage rate is irrelevant.

True (5)

False (1)

Which one of the following statements about Roth IRA accounts is NOT true?

You are required to make annual withdrawals after age 70½. (5)

You cannot deduct your contributions from your federal income taxes . (4)

You get tax-free growth – you pay no taxes when you withdraw your money during retirement. (2)

Too much income can disqualify you from having a Roth IRA. (1)

True or false? The safety record and theft rate of a car model will have no impact on the cost of auto insurance.

True (1)

False (5)

Given the choice between saving for your retirement or saving for your child’s college, most financial planners say you should:

Save for college; your children will have more income with a college degree and better positioned to take care of you in your old age. (2)

Save for retirement; your children will have more options for paying for college than you will have for retirement income. (5)

Do a 50/50 split between the two: It’s better to balance the two goals than pick one. (4)

Discourage your child from attending college. In most cases, it’s not a good investment. (1)

If someone hacks into your debit card account, what’s the maximum amount of money you could lose if you notify your bank within two business days?

$50 (5)

$500 (2)

$100 (4)

$1,000 (1)

If you’re buying a condo, which of the following questions is NOT important?

What percentage of the condos in the development are owner-occupied? (1)

In the past five years, have the homeowner association fees risen each year by more than the inflation rate? (4)

What’s the cumulative FICO score of current condo owners in the development? (5)

Have more than 3 percent of the condo owners not paid their association fees in the past three years? (2)

Paying off high-interest credit card debts with a low-interest home equity line of credit (HELOC) is good financial advice. True or false?

True: You want to consolidate your debts at the lowest interest rate possible. (1)

False: Most HELOCs are variable interest rate loans. If interest rates rise, and you can’t make your monthly HELOC payment, the lender could foreclose on your house and use the equity to pay for the balance due. (5)

Which of the following is NOT a benefit of a 529 college savings plan?

Withdrawals are free of federal and state tax. (4)

No limits on age or income. (2)

Contributions are deductible on your federal income tax return. (5)

You can set up a 529 plan for yourself. (1)

A reverse mortgage offers which one of the following benefits?

A source of income for homeowners over age 62 (5)

Lower interest rates on monthly mortgage payments (4)

A lump sum loan on second home mortgages (2)

A way to get your grandchildren to stop visiting unannounced (1)

True or false? If you drive a car at least 10 years old, you should NOT drop the collision and comprehensive insurance coverage to save money.

True (1)

False (5)

If you have long-term Treasury notes or bonds and interest rates are rising, or expected to rise, a good strategy would be to:

Sell your long-term bonds before they mature and invest in stocks. (4)

Sell the bonds and create a bond ladder – in a five- or 10-year bond ladder, with equal amounts apportioned to a 1-year bill, a 2-year note, etc. – so that you can roll money into higher yield bonds each year. (5)

Sell the bonds immediately and put it into long-term certificates of deposit. (3)

Hold the long-term bonds to maturity and ride out the interest rate rise. Patience always pays. (2)

Buy more long-term bonds as soon as possible. (1)

A high FICO score, means that you :

Will be more likely to qualify for a low-interest rate loan (5)

Have a lot of credit cards (4)

May be close to bankruptcy (2)

Are a socially responsible investor (1)

COBRA is an abbreviation for:

Consolidated Omnibus Budget Reconciliation Act – a federal law that gives workers who lose their jobs the right to continue pay for their health-care insurance coverage for a limited period of time. (5)

Co-payment of Borrowed or Restricted Assets – A law that allows you to get someone to co-sign a loan and thereby qualify for a lower interest rate and more funds. (1)

A Chevy concept car created by Carolyn Shelby. (2)

Continued Basic Relief & Assistance – a federal guarantee of health insurance for low-income US residents (4)

If you want a hedge against inflation or the collapse of a currency (or civilization), you might put some of your money into:

Mutual funds invested in commodities (4)

Gold (5)

Long-term bonds (2)

US dollars (1)

Every mutual fund has an annual fee, known as the expense ratio – usually ranging from 0.2 percent to 2 percent. True or false: The higher the expense ratio, the better the mutual fund performance?

True. Better pay has consistently produced better performance from mutual fund managers (1)

False. If expenses are high, the fund performance has to be even higher for the investor to break even. There's no correlation between performance and the mutual fund expense ratio. (5)

True or false? Historically, real estate (especially homeownership) has produced a better average annual return than stocks.

True: US home prices rose three times as fast as stocks between 2001 and 2006, according to S&P/Case-Schiller indices. That’s a 12.4 percent increase per year, compared with just 4.3 percent for the S&P 500 stock index. That’s not typical, but reflects the long-term record of home prices rising at a faster rate than stock prices. (1)

False: The long-term average return for stock prices is about 10 percent. Housing prices, historically, rise at the same rate or slightly greater than the long-term average US inflation rate of 3.5-4 percent. (5)

What key factor or factors will generate the most wealth via compound interest?

Time and regular deposits (5)

Small deposits, followed by large deposits (2)

Time (4)

Investing in commodities (1)

Home mortgage interest rates most closely follow which financial instrument?

1-year US Treasury bills (4)

15-year US savings bonds (1)

Certificates of deposit (2)

10-year US Treasury notes (5)

Which is NOT one of the benefits of a traditional 401(k) or 403(b)?

An immediate tax break, every dollar contributed lowers your taxable income. (4)

No penalties if you need to withdraw 401(k) dollars for an emergency. (5)

No taxes paid on capital gains and dividends until you withdraw the money. (2)

A maximum contribution of at least $17,000 each year. (1)

History suggests which of the following offers the greatest return?

Stocks (5)

Gold coins (1)

Gold mutual funds (2)

Real Estate (4)

Pick the answer that is NOT a true statement about socially responsible investors:

They invest based on religious and/or ethical values. (4)

They invest based on company policies on issues they hold dear, such as the environment or community development. (2)

They invest based on how well a company treats its employees. (1)

They invest based on a company’s level of social media participation. (5)

A total stock market index fund is:

A mutual fund that includes one of every stock in the Dow Jones Industrial Average. (2)

A mutual fund with stocks chosen from the S&P 500 index. (4)

A fund invested in a mix of large, mid-size, and small companies. (5)

A fund based on the companies that provide the ingredients for Total breakfast cereal. (1)

College-savings 529 plans allow you to change your asset allocation (between stocks, bonds, or cash) how many times per year?

Once (5)

Twice (4)

Three times (2)

As many as you like (1)

If you’re under age 30, most financial planners would say that your allocation between stocks and bonds should be approximately:

80 percent bonds, 20 percent stocks (4)

No stocks or bonds. Gold coins and gold mutual funds are the best long-term investments. (2)

20 percent bonds, 80 percent stocks (5)

90 percent certificates of deposit, 10 percent money market funds (1)

Financial planners agree that loaning money to family and friends is a bad idea. But if you do it, which is the best guideline to follow?

Consider the money a gift, not a loan. The relationship is more important than the cash. (5)

Be ready to loan more money. Be consistent and supportive of their situation. (1)

Remind the borrower on a regular basis how much they owe, otherwise you'll never get it back. (2)

Be specific about the terms for repayment. (4)

Last question: Typically, people pay less federal tax once they retire. But with America's debt at unsustainable levels, it's possible that future retirees will pay higher tax rates. Given that uncertainty, should you invest in a traditional or Roth IRA or 401(k)?

Roth. While you don't get the immediate break off your income tax, your money can compound tax-free and Uncle Sam can't touch it when you withdraw it in retirement. (3)

Traditional. Take the immediate tax break because, let's face it, with the paltry amount most Americans are saving, they'll be eating a lot of Tuna Helper between AARP meetings. (1)

It depends. Use a Roth IRA or 401(k) in your early years, because your money will have the most time to compound. Switch to a traditional IRA or 401(k) as you near retirement and your income goes up, because the immediate tax break will become more valuable. (5)