What’s Your Financial IQ?

Phil Ashley/Getty Images (money); ahmad agung wijayanto/Shutterstock (question marks)

1. What’s the minimum amount of money you should have saved for emergencies?

A) One months’ living expenses.
B) Three months’ living expenses.
C) Six months’ living expenses.

2. What kind of debt should you pay off first?

A) Car loan
B) Credit card
C) Whatever has the highest interest rate

3. When should you begin paying off your student loans?

A) 1 years after college
B) As soon as possible
C) 5 years after college

4. How much of your income should you be saving for retirement?

A) 2 percent
B) 10 percent
C) 5 percent

5. What two factors listed here are among the five that go into calculating your credit score?

A) Payment history, amount of debt
B) Portfolio diversity, number of loan applications
C) Savings account balance income tax owed

6. If you’re given a $100 loan with a 2 percent interest rate, how much will you owe in 1 year?

A) $102
B) $112
C) $120

7. Which of these is NOT a way to build credit history?

A) Taking out a loan (either in your name or as a cosigner)
B) Purchasing a government savings bond
C) Signing up for a credit card

8. If your employer will match your contribution, which is the best retirement savings option?

A) 401 (k)
B) Roth IRA

9. What is the primary difference between a savings and a checking account?

A) Money in savings is just for emergencies; money in checking is for everyday expenditure
B) Money in checking earns interest; money in savings is there when I need it quickly
C) Money in savings earns interest; money in checking is easily accessed

10. What percentage of your take-home pay should go toward housing each month?

A) Around 50 percent
B) Around 30 perfect
C) Around 60 percent

11. Which of these activities will negatively impact your credit score?

A) Applying for a loan
B) Withdrawing money from a 401(k) before retirement
C) Using a high percentage of the credit available to you

12. How much does it cost to check your credit score?

A) Nothing!
B) Around $9.99 per report
C) I bet over $19.99 per month

the word 'answer' in a blue text bubble
Justin Dodd/Mental Floss

Answers: 1:C; 2:C; 3:B; 4:B; 5:A; 6:A; 7:B; 8:A; 9:C; 10:B; 11:C; 12:A