QUIZ: Test Your Money Know–How
By Arkansas NEXT: Money on Friday, May 14, 2021
1. You see a cool pair of shoes online and really want to buy them, but they’re kind of expensive. What should you do next?
Charge them to your credit card. You’re trying to build your credit.
Ask your parents to buy them for you.
Pick up an extra shift at your part-time job to pay for them.
2. You just scored a part-time job, and you can’t wait for that very first check. How are you preparing for payday?
Opening a checking account.
Opening a checking account and creating a budget.
Opening a checking account and creating a budget, plus setting up an automatic transfer of 10% into a savings account you’ve opened up.
3. Graduation is fast approaching, and it's time to think about higher education. How do you approach this decision?
Consider only schools where you’ll be able to get financial aid and scholarships.
Start touring cool college towns and getting a feel for where your friends are going to go.
Investigate alternative paths, like an apprenticeship or joining the military. You want to get trained for free in a high-demand field—and fast.
4. You got your driver’s license last week and are ready to hit the road. If your guardians don’t buy you a ride, how will you consider this purchase?
I need a reliable car that will last me a really long time.
I’ll do a lot of research on cost to maintain, cost to insure, gas mileage and resale value.
TBH, I’m looking for the nicest car I can get for the lowest monthly payment.
5. You read how you need to start building credit, so you go to your bank and request a credit card. What do you do next?
I will open the card but only use it for emergencies.
I will open it, using it only on things I can pay off in full each month.
I won’t get a credit card. It’ll just get me into debt.
6. What does “being rich” mean to you?
Having fancy clothes, driving flashy cars, going on luxury vacations and living in a big house.
Having a lot of money saved up for the future.
All of the above.
7. How much money should you have in an emergency fund at all times?
One month’s salary.
Enough money you could live off of for three to six months.
A year’s salary.
8. The first thing you should do after getting paid is …
Save at least 10%.
Pay your bills.
Buy yourself something fun.
9. Living by the 50-30-20 budget rule means …
You get 30% of your income to blow each month.
I’ve never heard of the 50-30-20 rule.
50% of your income should be used for needs, 20% for savings and 30% for everything else.
10. What’s the downside to using PayPal instead of a real bank?
Your money is not insured by the FDIC.
None. Online banking is the wave of the future.
You can be charged fees.
YOUR TOTAL: 0
The Results
21-30 points
You’re real-world ready.
You’ve been listening to your mentors, family and teachers. You’ve been absorbing the pages of this magazine. You are already saving and thinking about the future. You know it takes discipline and patience. You understand that living within your means is far cooler than living paycheck to paycheck. As early as your first job, you’re working towards a three- to six-month emergency fund and building a credit history (without debt). You value financial peace and security more than material things. Delve deeper into money and relationships, paying taxes and the importance of having a personal banker—you’re ready for these adult-ish topics!
11-20 points
You should be proud!
This is about where your teachers and mentors think you should be at this age. Hey, you’re still really young. You’re not going to be an expert yet. But we are so glad you’re grasping life’s basic principles as they relate to spending and saving, and we’re excited for you to put these to work in your first jobs, in college and in your relationships. How can you keep learning and growing in your financial literacy? May we recommend mastering your money mindset? Lock in your perception of wealth and comfort. This will set the tone for the rest of your life. Also, brush up on your plans for paying for higher education, and with your smarts, consider the financial careers on pages 60-66 for in-demand and high-paying jobs to help you keep saving.
6-10 points
You’re getting there.
You’ve stashed away a few birthday checks and worked a few carhop shifts at Sonic, but that money won’t go far. How do you plan to cover your higher education? Are you sure you really need that car you’ve been considering—or all those new clothes? Now is the time for a crash course on managing money and for setting financial goals. Make time to talk with an adult honestly about money (we’ve even got a list of questions for you to ask them on the next page). You’d be surprised how much you can learn from other people’s mistakes or wise choices. Learn how to create a budget—then stick to it! This is a fabulous place to start. And read about the ways your favorite social media apps are designed to help you FAIL. That’s right. Don’t let them mess with your future. You’ve got big plans.
0-5 Points
You need to start taking your finances seriously.
You’re a little behind in your money know-how. We’ll get you up to speed. While the best time to plant a tree was 20 years ago, the second best time is today. We encourage you to get serious and quick. The real world is fast approaching, and we want you to be armed and ready. First things first, highlight some of the facts you find most applicable to your money mindset. Do you need a change in perspective? Then, think about how you’ll budget when you get your first job. Start thinking about the future today—want to be a millionaire? We show you how to get there slowly but surely on page 70. This also feels like a great time to remind you how terrible credit card interest is (page 42)—better yet, stay out of debt!
