How Financially Smart Are You? (Money Quiz)

[Music] well hey you guys today's episode is for all my Millennial friends out there who wish they had been taught about taxes in school rather than having to find the X and the Y coordinates on a graph sheet of paper God bless those days do you ever look around and just think okay I know I'm technically an adult but I have no idea how the housing market works so if that sounds familiar to you you are not alone loan and that's why I'm bringing this personal finance quiz directly to you so I'm going to ask you 10 questions about everything from investing to insurance and together we will find out how much you know about money and what you have left to learn but there is a kicker just because you can pass this quiz with flying colors doesn't mean that you are good with money little plot twist so make sure to stay till the end so you you can hear what I mean by this plus I'll share some must-have resources that can help you wherever you fall on the financial literacy scale all right the first question of this financial literacy quiz is we all know budgeting is important but making a budget is different from balancing a budget what does balancing your budget mean a you're able to buy anything you want B your income for the month matches how much you decided to spend and save C your budget stays the same month after month or D you can weigh your money on a scale if you answered B your income for the month matches how much you spend and save you are correct well done that is a balanced budget to make sure the money coming in that there is enough there to pay all of your bills to save some to give some you have a balanced budget all right question number two which of these factors impacts your credit score the most a amounts owed B B length of credit history c a credit Mix D new credit or E payment history the answer is e payment history now everything that we talked about there does contribute to what your FICO score is okay so you look at how it's s calculated and that is your credit score that is how a lot of is calculated but when you look at the pie chart of all those things the biggest percentage is payment history so making sure that you're paying on time and those of you working your way out of debt that's why we always say to pay minimum payments to make sure you stay current on everything all right question number three what's the lowest amount you'd need to save for a down payment to avoid PMI which is private mortgage insurance a 3% B 10% C 20% or D 25% the answer is C 20% so we always recommend if you're saving up for a down payment anywhere from 5 to 20% so if you are a new homeowner if you're buying your first house you can go as low as 5% if you want but for those of you that have equity in a house like we would really push you to 20% even though that's a lot again avoiding PMI which is so great that is a fee that you don't have to pay anymore you don't have to pay it's great saves you money in the long run that is key so that 20% is amazing all right question number four and which type of retirement account offered by your employer would you contribute after tax dollars a a traditional 401K B an IRA c a Roth 401k or d a pension the answer is c a Roth 401k so 401ks are retirement accounts that your employer offers so they will usually do a match so it could be three four 5 6% match and you can match up to that now traditional you fund your 401k before you pay pay taxes a Roth the word Roth which also could be a Roth IRA as well but Roth is important because this is after tax dollars which means you fund your 401k after you've paid taxes which means you get paid your salary which is awesome and then we all know after taxes yep that drops and what you actually bring home is a lot lower than that and then when you pay and you put in to your 401k out of that money that means you've already paid taxes on it so the growth from there is taxfree which is incredible if you do a traditional IRA or traditional 401K again that means you're putting money in before you've been taxed which means you're going have to pay taxes when you pull money out of that account later on down the road so you can do anything Roth that is huge all right question number five every time you swipe a credit card you have to deal with a annual percentage rate this means if you carry a balance your interest will be charged how often a yearly B monthly C weekly or D daily the answer is B monthly every month you will pay interest if you hold a balance on your credit card and listen people are like well I pay mine up every month yes some do but some don't and you don't go win signing up for credit card thinking I'm going to go deeply in debt and be stressed out but sometimes that's where people find themselves and credit card debt has reached a alltime high in our nation so you guys be aware of this be aware of this cut up the cards so you don't have to worry worry about about all this interest rate stuff okay it's a better way to live before we finish the quiz I want to tell you a story about a Christian healthc Care Ministries member named Jenna so one of her biggest concerns about being a mom while being an entrepreneur was how to take care of Health expenses but Jenna says that chm has been a godsend and her family can feel secure no matter what happens to learn more and join at budget all right question number six which type of debt cannot be erased by bankruptcy a medical debt B personal loans c credit card debt or D student loans the answer is D student loans yes they are not bankruptable they are around forever and ever and ever not fun but the great thing is you can you can get out you guys we teach people all the time how to get out of debt including student loan debts so is possible for you to be debt free all right question number seven which type of car insurance coverage would pay for damage to the other person's car when an accident is your fault a collision B comprehensive C personal liability or D property damage liability the answer is D property damage liability now listen insurance is one of those parts of money that can get so granular and like specific so again always make sure that you're listening to people out there who are wise with their money that are experts in this stuff to be able to know okay what kind of insurance do I need we have actually a coverage an insurance coverage checkup at Ramy you can check out but knowing all of this again it's good knowledge to have all right question number eight what isn't included in your closing costs when buying a house a the down payment B loan application fee C title insurance or D loan origination fee the answer a your down payments yep not part of the closing cost something you have to save up for sure make sure you have a good down payment we said it earlier but remember 5% at the least up to 20% is fantastic all right question number nine which of the following is not a mandatory deduction from your first paycheck at a new job a social security and Medicare taxes B 401k contribution C state and local income tax or D all of these are mandatory deductions the answer B your 401k contribution is not mandatory and in fact we don't encourage you to fund retirement until you are debt free and have a fully funded emergency fund all right question number 10 which of the following is considered an excellent credit score a 720 B 750 C 800 D 900 or E they're all considered excellent the answer is C 800 oh you guys but I will say the credit score is not a place that we worship and we focus on and we try to do everything we can to build a credit score because debt I don't want to be part of your life and you usually have a credit score to go into more debt so it's not the thing we're focusing on we were focusing on getting out of debt putting money back in your life through an emergency fund and funding retirement all of that that is the best way to go but I'm curious how' you do on the quiz you guys listen I have good news and bad news for you the bad news first if you passed and got every single question right again that doesn't necessarily mean you are great with your money the good news even if you got some of the questions wrong this could actually mean you're still making wise financial decisions and the reason for all of this is because when it comes to debt and credit scores and interest and Loans these are all things that if you're following the baby steps and you have your priorities in check you may not be as familiar with because you don't need to be your credit score is only relevant and important if debt is a major part of your life like we said earlier but if you're living debt free you're paying for things in cash you're saving and you're investing it's not something you're worried about and this is is where financial piece comes in when you don't even have to bother worrying about things like credit scores and interest rates because you're in an amazing position you're not using debt and that is where I want you guys to be so if this is the kind of lifestyle that intrigues you make sure to check out every dollar every dollar is our budgeting app that allows you to put all of your knowledge into actual practice actually using that knowledge out there to win with money so download it today for free and start seeing progress and send this video to a friend who may know a a lot or a little bit when it comes to money and remember to take control of your money and create a life you [Music] love

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