I came across an article recently that said “94% of Americans cannot pass a basic financial literacy quiz.”

That’s not good, obviously, but I wasn’t surprised either. Most Americans are not taught basic money concepts in school or at home, and often, children grow up learning bad money habits from their parents. Most Americans grow up without a basic knowledge on how interest works for and against you, what a stock is, what a bond is, etc. 

So I thought it would be a fun and educational exercise to test your financial literacy on the One Minute Retirement Tip podcast this week. 

I found a financial literacy test online from the FINRA Investor Education Foundation. It’s their 

National Financial Capability Study, and it has just 5 questions. The question topics range from basic principles on interest, diversification, how debt works, and basic bond concepts. 

Each day on the podcast this week, I’ll go through each question and answer on the quiz, and we’ll discuss the results, and why it’s important to know the RIGHT answer to each question.

I did take this test myself, and I have to tell you I was pretty nervous...it would be quite embarrassing for your Dear Leader here on the podcast to miss any of these basic financial literacy questions. 

But rest assured, I did receive a 100% grade, and I even got the bonus question right...thank goodness. 

Just a quick but related side note, when I was researching this topic, I came across another study that looks at financial literacy reality vs. perception. See, many people are overly confident in their financial literacy. They think they know more than they actually do, which can be dangerous since that overconfidence can cause you to not take the time to learn and understand basic money concepts. 

Financial literacy overconfidence is particularly a problem among millennials, my generation. One study looking just at college-educated Millennials, found that approximately 70% of them rated themselves as having high financial literacy; in reality, only 34% even had basic financial literacy.

Even if you think you can pass this week’s questions with flying colors, I hope you’ll stick around with me this week, where you may even learn something new. 

That’s it for today, but before you go, if you want to take the test for yourself, I’ll include the link to the test I’m using in the podcast this week. You can find it in the show notes wherever you listen to podcasts for today’s episode, which is episode 918.

Financial literacy quiz link: https://www.usfinancialcapability.org/submit_quiz.php 

Thanks for listening! 

My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance