Find out if you've got any practical money smarts

By Dian Vujovich

One of the amazing things about money is that there are always lessons to be learned about it. Always. No matter what our age, how long we live, the condition of our health or whether we have enough, not enough or an over abundance of this stuff that’s basically only a medium of exchange.

In The Washington Post online today (April, 12, 2012) was a 12-question financial literacy quiz. So, in the spirit of Financial Literacy month, I thought sharing some of the questions might be a great way to check your everyday-living financial literacy smarts. Below are eight of the questions:

1.Inflation can cause difficulty in many ways. Which group would have the greatest problem during periods of high inflation that last several years?

A. Older, working couples saving for retirement.

B. Older people living on fixed retirement income.

C. Young couples with no children who both work.

D. Young working couples with children.

2.Which of the following is true about sales taxes?

A. The national sales tax percentage rate is 6%

B. The federal government will deduct it from your paycheck.

C. You don’t have to pay the tax if your income is very low.

D. It makes things more expensive for you to buy.

3.Which of the following types of investment would best protect the purchasing power of a family’s savings in the event of a sudden increase in inflation?

A. A 10-year bond issued by a corporation

B. A certificate of deposit at a bank

C .A 25-year corporate bond

D. A house financed with a fixed-rate mortgage.

4.Which of the following statements best describes your right to check your credit history for accuracy?

A. Your credit record can be checked once a year for free.

B. You cannot see your credit record.

C. All credit records are the property of the U.S. Government and access is only available to the FBI and Lenders.

D. You can only check your record for free if you are turned down for credit based on a credit report.

5.Your take-home pay from your job is less than the total amount you earn. Which of the following best describes what is taken out of your total pay?

A. Social security and Medicare contributions

B. Federal income tax, property tax, and Medicare and social security contributions

C. Federal income tax, social security and Medicare contributions

D. Federal income tax, sales tax, and social security contribution

6.David just found a job with take-home pay of $2,000 per month. He must pay $900 for rent and $150 for groceries each month. He also spends $250 per month on transportation. If he budgets $100 each month for clothing, $200 for restaurants and $250 for everything else, how long will it take him to accumulate savings of $600?

A. 1 month

B. 2 months

C.3 months

D. 4 months

7.Sara and Joshua just had a baby. They received money as baby gifts and want to put it away for the baby’s education. Which of the following tends to have the highest growth over periods of time as long as 18 years?

A. A checking account

B. A savings account

C. A U.S. Government savings bond

D. Stocks

8.If your credit card is stolen and the thief runs up a total debt of $1,000, but you notify the issuer of the card as soon as you discover it is missing, what is the maximum amount that you can be forced to pay according to Federal law?

A. $0

B. $50

C. $500

D. $1,000

The answers: 1: B; 2: D; 3:D; 4: A; 5:C; 6:D; 7: D; and 8:B.

Find all the questions and answers at: http://tinyurl.com/73klb6m