Skip to main content

Can you ace this 5-question financial literacy quiz?

Allen Wastler

Posted on June 17, 2018

Allen Wastler is a former financial journalist with over 30-years of experience, including time at CNBC, CNN, and Knight-Ridder Newspapers.
Young Asian-American woman in sweater looking at computer monitor and absently biting a fingernail

Young adults were asked the following questions in a recent nationwide survey. Only about one in five got them all right. How about you? The answers, as well as some information about where the questions came from and why they are important, are below.


1. When deciding how to invest your money, which of the following is LEAST important to know?

A. When you will need to use the money

B. How risky the investment is

C. Whether or not deposits can be made online

D. The expected rate of return on your investment

E. Don't know

2. Which factor has the biggest impact on a credit score?

A. Having a variety of types of credit

B. The amount of money you owe on your credit cards

C. The number of years that you have used credit responsibly

D. Your history of making payments on time

E. Don't know

3. If you opened a new savings account, which of the following accounts will grow your money the most?

A. Account 1: Interest rate 2%, interest compounded daily

B. Account 2: Interest rate 1%, interest compounded daily

C. Account 3: Interest rate 2%, interest compounded monthly

D. Account 4: Interest rate 1%, interest compounded annually

E. Don't know

4. What is the best strategy to avoid paying interest on your credit cards?

A. Pay the full balance each month

B. Pay the minimum balance each month

C. Make payments online

D. Have credit cards from two different banks

E. Don't know

5. Which one of these is NOT a successful budgeting strategy?

A. Keep some extra money in your budget for emergencies

B. Pay with a credit card if you have a hard time sticking to a budget

C. Revisit your budget regularly and make adjustments

D. Think about which items are your most important needs

E. Don't know

The questions came from the MassMutual Foundation’s FutureSmart Digital program , developed for middle school and high school students in partnership with education technology leader EverFi. Only 17 percent of respondents answered all five questions correctly. (Read more about the survey results here)

“The survey results underscore that many young adults lack the basic financial knowledge needed to make informed choices, and there is a critical and growing need for youth financial education,” said Dennis Duquette, president of the MassMutual Foundation.

Indeed, the need for financial literacy  ̶  the basic understanding of financial concepts and practices  ̶  is growing for four basic reasons .

  • The advent of self-directed savings programs has made more consumers responsible for their retirement.
  • The financial environment has become more volatile in the last decade.
  • People are living longer, putting more importance on savings and retirement planning.
  • Financial vehicles and mechanisms have become more diverse and complex.

That’s making the need for educational programs like FutureSmart all the more important.

“The FutureSmart program reaches children during a pivotal time when they are establishing lifelong habits so they can achieve the financial well-being needed to build a more promising and secure future,” said Duquette.

Through the program, the MassMutual Foundation recently reached one million students – halfway to its goal of providing two million students with financial education by 2020. Students’ financial knowledge increased by an average of 67 percent after the completion of the program, based on pre- and post-assessment data collected in the 2016-2017 academic year.



1. The correct answer is C; 51 percent answered correctly.

2. The correct answer is D; 52 percent answered correctly.

3. The correct answer is A; 55 percent answered correctly.

4. The correct answer is A; 78 percent answered correctly.

5. The correct answer is B; 79 percent answered correctly.

Need a financial professional? Let us know ...

* = required

By submitting this request, I agree to receive e-mails and phone calls using automated technology from MassMutual, its financial professionals, affiliates or vendors on its behalf regarding MassMutual products and services, at the e-mail address and phone number(s) above, even if it is for a wireless phone. I understand I can contact a local financial professional directly to make a purchase without consenting to receive calls from MassMutual.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.