Friday, 1 September 2017

Test Your Financial Literacy Here

What is financial literacy? What do people mean when they say are you financially literate? Does this mean I need to study a subject named financial literacy?

No, financial literacy refers to the knowledge and skills required by and individual to make financial decisions. Financial literacy and its stability are the two key aspects which will lead to an efficient economy. India is a fast growing economy and not many people have a clear picture on how to manage their finance and look in the future. A person is considered intelligent and wise when they have secured their finances by banking in bonds, debentures or any other financial product. This helps you secure the future.

      Understanding the needs and wants in terms of financial options, opportunities, services has become complex from the last fifteen years. Be it preparing for a monthly budget or saving for child’s tuition. Getting a grasp o the basic terms will serve you as n advantage.   

The following quiz will provide you a glimpse on financial literacy and basics to adhere it,

1. What is your gender?

·         Male
·         Female

2. What percentage of your income should be saved?

·         5%

·         10%

·         15%

·         33%


10% being the right answer

3. True or false: creditworthiness is low leads to low credit card interest rates

·         True

·         False

Answer being false; if your credit worthiness is low the interest rates will be high.

 4. What is APR?   

·         Average Personal Revenue

·         Annual Percentage Rate

·         American Public Radio

Annual Percentage Rate being the right answer

5. Assets minus liabilities determine a person’s ___________.

·         Net worth

·         Economic potential

·         Sweet spot

Net worth being the right answer

6. How many credit cards do you use?

·         1
·         2
·         4 or more
·         I don’t use credit cards

It’s suggested not to use more than two credit cards. The fewer cards you use the less liability you tend to pay.

7. How do you normally make your credit card payment?

·         Make minimum payment
·         Pay entire balance
·         Pay more than minimum but not entire amount
·         Credit card payments are taken care by parents/spouse

Always try paying the entire balance amount, to avoid dip in the rating.

8. Where did you learn most about managing money?

·         From family
·         From friends
·         From school
·         Experience in managing my own money
·         From books

9. Do you prepare a monthly budget?

·         Yes
·         No

Always make secured plans in terms of finances

10. Do you stick to your fixed monthly budget?

·         Yes
·         No

Be the wizard of your financial plans and witness the magic yourself.

11. Let's say you have INR 100000 to invest. Which would be the safer way to invest it?

·         Put money in one investment.
·         Put your money in more than one investment. 

Put your money in more than one investment being the right answer

One word diversification always put money in different investment plans as they have different schemes ad returns. 

            12. Which portfolio has the most aggressive risk level?

·         50% stocks, 50% bonds
·         80% stocks, 20% bonds
80% stocks, 20% bonds being the right answer

Stocks are generally equity investments and the risk levels are always high.

13. Do you get loans for bad credit?
·         Yes
·         No

Usually it’s a no, but you can opt from various banks which offer loans with higher interest rates if the credit report is bad.

Having a sound knowledge of finances can help you grow further in life. This was just the tip of the iceberg and we hope that we gave you a heads up on some financial terms.

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