Personal finance / Quiz
Personal finance quiz
15 questions. Every option is explained, so a wrong answer still teaches you something. Wrong answers go to your review list.
Answer the questions below. Your score updates as you go.
Question 1/15 · Money basics
What does "pay yourself first" mean?
✓ Right: saving is treated like a bill, so it happens before the money can be spent.
✗ That is spending first, and it usually leaves less for both bills and saving.
✗ That is the opposite: most months very little is left, so the saving rarely happens.
✗ The idea is about the order of saving and spending, not about family or loans.
Question 2/15 · Money basics
Marko earns €1,000 a month. His needs are €745, his wants are €175 and he saves the rest. What share of his income does he save?
✓ Right: €1,000 − €745 − €175 = €80, and €80 is 8% of €1,000.
✗ That is the saving share in a 50/30/20 split, not what Marko's numbers give.
✗ That is the share of his wants, €175 out of €1,000.
✗ That is everything except needs, which includes his wants as well as his saving.
Question 3/15 · Money basics
Why is it useful to track every payment for one month before changing your budget?
✓ Right: big bills are easy to remember, but €2 here and €8 there are usually what surprises people.
✗ No bank rule asks for this; tracking is for your own clear picture.
✗ Tracking does not change your income; it shows how you use it.
✗ Cutting spending while tracking hides your normal pattern, which is what you want to see.
Question 4/15 · Money basics
Your essential costs are €900 a month and your income is €1,200. What is a six-month emergency fund using the usual rule?
✓ Right: the target is based on essential costs, so 6 × €900 = €5,400.
✗ That is six months of income, but the fund has to cover costs, not replace your whole salary.
✗ That is three months of costs, the low end of the usual range.
✗ That is only two months of costs.
Question 5/15 · Money basics
Which place fits an emergency fund best for most people?
✓ Right: it is safe, easy to reach within a day or two, and separate from everyday spending.
✗ Prices can fall just when you need the money, so it is not safe enough for emergencies.
✗ You cannot get the money back on the day you suddenly need it.
✗ Cash at home can be lost or stolen, earns nothing and loses purchasing power to inflation.
Question 6/15 · Money basics
A card charges 24% APR. Roughly what is the monthly rate?
✓ Right: a simple way to see the monthly rate is 24% ÷ 12 = 2%.
✗ 24% is the yearly figure; interest is usually charged each month at a fraction of it.
✗ That would be the rate for half a year, not for one month.
✗ That is 24% divided by 100, not by 12 months.
Question 7/15 · Money basics
You owe €2,000 at 24% APR and pay a fixed €60 a month with no new spending. How long does it take to clear?
✓ Right: about €40 of the first €60 goes to interest, so the debt falls slowly and needs 56 payments.
✗ That is €2,000 ÷ €60, which ignores the interest added every month.
✗ Clearing it in 12 months would need a payment of about €200 a month.
✗ That only happens at €40 a month or less, when the payment does not exceed the monthly interest.
Question 8/15 · Money basics
What is the main difference between the avalanche and the snowball method?
✓ Right: avalanche usually costs less interest, while snowball gives earlier wins that keep people going.
✗ Both methods pay the minimum on every debt and put all extra money on one debt at a time.
✗ It is usually the other way round, because avalanche attacks the most expensive debt first.
✗ That is consolidation, a different idea; neither method needs a new loan.
Question 9/15 · Money basics
Prices rise by 3% a year for 10 years. In today's money, about how much does €1,000 in cash buy at the end?
✓ Right: €1,000 ÷ 1.03 to the power of 10 is about €744.09.
✗ That treats 3% a year as a simple 30%, but inflation compounds on a smaller amount each year.
✗ That is roughly the effect of a single year at 3%, not ten.
✗ The note still says €1,000, but each euro buys less, so its purchasing power has fallen.
Question 10/15 · Money basics
Your savings earn 2% a year and inflation is 3%. What is your real return, roughly?
✓ Right: real return is roughly nominal return minus inflation, so 2% − 3% is about −1%.
✗ That is the nominal return, the change in euros before inflation.
✗ Inflation is subtracted from your return, not added to it.
✗ That would need your savings to earn the same 3% as inflation.
Question 11/15 · Money habits
Why does an automatic transfer on payday usually work better than deciding to save each month?
✓ Right: the decision is made once, and most people rarely cancel a transfer that already works.
✗ The advantage is about behaviour, not about a special interest rate.
✗ Automation decides when you save, not what return the money earns.
✗ Automatic saving is a good way to build an emergency fund, not a replacement for one.
Question 12/15 · Money habits
Money is tight this month and your automatic saving is €50. What is usually the better step?
✓ Right: a smaller transfer keeps the habit alive, and you can raise it again later.
✗ Stopped habits often never restart, so lowering is safer than cancelling.
✗ Card interest is usually far higher than what savings earn, so this costs you money.
✗ A larger transfer in a tight month is likely to fail and push you into debt.
Question 13/15 · Money habits
You save €50 a month for 20 years at an assumed 4% a year. You pay in €12,000. About how much is the final amount?
✓ Right: about €6,339 of growth is added on top of the €12,000 you paid in, if the assumed 4% holds.
✗ That is only what you paid in; at 4% a year the money also grows.
✗ That adds 4% only once, but growth is added every year and compounds.
✗ That is far too high for 4% a year; it would need a much higher return.
Question 14/15 · Money habits
A caller from your bank's number asks you to read out a code that just arrived by SMS, to "block a fraud". What should you do?
✓ Right: caller ID can be faked, and a call you start yourself reaches the real bank.
✗ The number on your screen can be faked, and the code usually approves a payment the scammer wants.
✗ Scammers often have such details from old data leaks, so they prove nothing.
✗ No real bank asks you to move money to a new account to protect it; this is a scam.
Question 15/15 · Money habits
You lost money to a fake investment site. A "recovery agency" contacts you and offers to get it back for an upfront fee. What is this most likely to be?
✓ Right: victims are often targeted again; report the loss to your bank and the police instead.
✗ Real police do not charge you to investigate or send paid agents to collect fees.
✗ Contact out of nowhere that asks for money first is a warning sign, not good news.
✗ Crypto payments are very hard to reverse, which is exactly why scammers ask for them.