Quiz: College students, how financially literate are you?

Financial literacy is a set of skills and knowledge that lets us make informed and effective decisions about money. For college students, it’s particularly important. Living on your own for the first time comes with its suite of financial pickles. How much to budget for food? Is this textbook too expensive to buy? Should I repay part of my student loan now or later?

These are important questions that need urgent answers. Yet, many students in US universities have not had any formal education on the subject. This leaves them stressed about their finances, and potentially impacts their studies. Conversely, those who have taken mandatory classes on financial literacy in high school were found to make better decisions later in life.

Which group do you belong to? How well-versed are you in personal financial management? Test your knowledge with our quiz!

1. Which of the following statement is correct?

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Credit is your reputation as a borrower.

Credit is your reputation as a lender.

Credit is your reputation as a guarantor.

Correct! Wrong!

2. Which of the following is the most accurate definition of a 'budget'?

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Budget is a plan for your money that tracks your income.

Budget is a plan for your money that tracks your income and expenses.

Budget is a plan or your money that tracks your income, expenses and savings.

Correct! Wrong!

3. How much is the student loan debt in US today?

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US$500 million

US$1 trillion

US$1.35 trilllion

US$1.5 trillion

Correct! Wrong!

4. Having a high credit card balance is good. True or false?

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True

False

Correct! Wrong!

5. Which of the following is the best financial choice to pay for college?

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High-cost private loans

Grants and scholarships

Subsidised federal loans

Correct! Wrong!

6. What is 'compound interest'?

The addition of interest to the principal sum of a loan or deposit. In other words, interest on interest.

The total amount of monthly interest in an entire calendar year.

The interest rate of your loan or deposit multiplied by one's age.

Correct! Wrong!

7. Will going into default affect your credit score?

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Yes

No

Correct! Wrong!

8. Is it financially wise to make prepayments to your education loan?

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Yes

No

Correct! Wrong!

9. Which is the most comprehensive resource for tax benefits for higher education in the US?

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Google

CNN Markets

IRS (Internal Revenue Service) official website

Correct! Wrong!

10. What is a 'deferment/forbearance'?

Permanent pause on loan repayments, granted at the lender's discretion.

Temporary pause on loan repayments, granted at the lender's discretion.

Temporary pause on loan repayments, without the lender's discretion.

Correct! Wrong!

QUIZ: College students, how financially literate are you?

Money Whiz

Hello, expert! Congratulations on getting the majority of these confusing questions right. It's clear you've put the time in to understand some of the most pressing financial concepts relevant to college students today. The more you know the better, and we suggest you keep up this great work!

Somehow OK

We get it. Adulting is hard! But when it comes to your finances, we believe it pays to put in the legwork to get your financial literacy up-to-speed. Check out the many tools and resources online, or sign up for online classes or speak to your university about possible tutors to help you. Good luck!

Late Bloomer

It's time to stop burning your hard earned money away! Instead, start with understanding the basics, such as budgets and student loans. Mastering these wont' always be easy. But soldier on and you'll see the benefits will last a lifetime!

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