Most of us could do with a crash course in personal finance. In fact, two-thirds of people around the world failed a short test of basic financial concepts. The five-question test—created by Standard & Poor’s, Gallup, the World Bank, and George Washington University—was posed to 150,000 people in more than 140 countries last year.
It tests understanding of risk, inflation, interest, and compound interest.
To pass, people had to demonstrate competency in three out of four topics. Yet just 33% of people were able to do that. See how you fare on this slightly modified version of the quiz.
After each question, you'll be told how various countries did on it, too.
Do the test here.
Better still, get your kids to do it!
One thing I've taken out of the results is that next time I go out to dinner with a Norwegian, a Swede or a Dane, I'll get them to calculate the tip! Those from the cold climates understand money better than anybody apparently.
What's also interesting, among English-speaking economies, Australia lags behind Canada and the United Kingdom in its percentage of financially literate citizens. It's still ahead of the US though, with 64 per cent of Australians deemed financially literate. Surprisingly, we are way ahead of Japan.
Our own Government Regulator has also drawn up it's own 10 question quiz.
It covers a few elements of basic financial literacy we all should be aware of before we make decisions about any major investment. See how you do.
Take the test here.
They've other quizzes on the site that cover super and borrowings as well.
Go to our face book page and let us know how you went, or leave your comments below.