Take this quiz to see how prepared you are to make financial decisions

The answer is A: Because Sarah needs to pay the money to Breezy Clothing. 

Question level: 1

At level 1 students can identify common financial products and terms and interpret information relating to basic financial concepts. They can recognize the difference between needs and wants and can make simple decisions on everyday spending. They can recognize the purpose of everyday financial documents such as an invoice and apply single and basic numerical operations (addition, subtraction or multiplication) in financial contexts that they are likely to have experienced personally. 

Nature of the task

Recognize the purpose of an invoice. Calculations are not required in this item. 

The context is individual. The question belongs to the money and transactions content category because it involves awareness of the different forms and purposes of money and handling simple monetary transactions such as everyday payments.

Financial literacy process

The process is identify financial information because the individual has to search and access sources of financial information, and identify or recognize its relevance.

Tools to help you develop this proficiency

Money as You Grow - This digital resource serves parents who want to prepare their children for a financially capable adulthood. There are activities for children aged 3 to 5, 6 to 12, and teens to young adults. There is also a book club for children ages 4 to 10. 

The answers is: 10

In 2015, 23.3 percent of U.S. students were assessed as proficient at level 2.

Question level: 2

At level 2 students begin to apply their knowledge of common financial products and commonly used financial terms and concepts. They can use given information to make financial decisions in contexts that are immediately relevant to them. They can recognize the value of a simple budget and can interpret prominent features of everyday financial documents. They can apply single basic numerical operations, including division, to answer financial questions. They show an understanding of the relationships between different financial elements, such as the amount of use and the costs incurred. 

Nature of the task

Identify the cost of postage on an invoice. 

The context is individual. The question belongs to the money and transactions content category because it involves awareness of the different forms and purposes of money and handling simple monetary transactions such as everyday payments.

Financial literacy process

The process is identify financial information because the individual has to search and access sources of financial information, and identify or recognize its relevance.

Tools to help you develop this proficiency

Ask CFPB - Ask CFPB is a set of clear, impartial answers to hundreds of questions about financial products and services including credit cards, mortgages, student loans, bank accounts, and credit reports. 

The answer is: Only the first statement is true.

In 2015, 25.7 percent of U.S. students were assessed as proficient at level 3.

Question level: 3

At level 3 students can apply their understanding of commonly used financial concepts, terms and products to situations that are relevant to them. They begin to consider the consequences of financial decisions and they can make simple financial plans in familiar contexts. They can make straightforward interpretations of a range of financial documents and can apply a range of basic numerical operations, including calculating percentages. They can choose the numerical operations needed to solve routine problems in relatively common financial literacy contexts, such as budget calculations. 

Nature of the task

Analyze information in a financial context by considering the information in a line graph about an investment product. The graph shows how the price of shares has changed over a year. The first part of the question assesses a student’s understanding that shares should be bought when the price is low. The second part of the question assesses whether students can correctly identify the increase in share prices and calculate the percentage change over time. 

The context is individual. The question belongs to the risk and reward content category because it involves the ability to identify ways of managing, balancing and covering risks, and an understanding of the potential for financial gains or losses across a range of financial contexts.

Financial literacy process

The process is analyze information in a financial context because it includes interpreting, comparing and contrasting, synthesizing, and extrapolating from information that is provided, and it involves recognizing something that is not explicit.

Tools to help you develop this proficiency

Financial rules to live by - There is evidence that providing financial rules can help consumers simplify some detailed and complex financial decisions by boiling them down to easy to remember rules. We’ve created several worksheets to help you create your own financial rules to live by for saving , spending , and checking your credit . 

My new money goal - Having a plan is one of the easiest ways to reach new money goals, navigate changes in income, or switch priorities in our lives. Use this guide to help you gain a clear view of where your money goes now, so you can decide where you want it to go in the future.

The answer is B: 2,500

In 2015, 19.2 percent of U.S. students were assessed as proficient at level 4.

Question level: 4 

At level 4 students can apply their understanding of less common financial concepts and terms to contexts that will be relevant to them as they move towards adulthood, such as bank account management and compound interest in saving products. They can interpret and evaluate a range of detailed financial documents, such as bank statements, and explain the functions of less commonly used financial products. They can make financial decisions taking into account longer-term consequences, such as understanding the overall cost implication of paying back a loan over a longer period, and they can solve routine problems in less common financial contexts. 

Nature of the task

Identify the net salary on a pay slip. The correct answer requires an understanding of the difference between gross and net pay, that is, the difference between pay before and after any deductions have been made (such as deductions for health care or tax). Calculations are not required in this item. 

The context is education and work. The question belongs to the money and transactions content category because it involves awareness of the different forms and purposes of money and handling simple monetary transactions such as everyday payments.

Financial literacy process

The process is identify financial information because the individual has to search and access sources of financial information, and identify or recognize its relevance.

Tools to help you develop this proficiency

Youth bank accounts - A savings account for your child could make a powerful difference in their future. This is emphasized in a study that shows children from low- or moderate-income families who have a savings account for college in the children’s name are more likely to go to college and more likely to graduate college. 

Paying for College - It’s more important than ever for students to make smart decisions about financing their college education. The CFPB’s "Paying for College" resources address the entire life cycle of financing college, from comparing college costs and financial aid offers, to shopping for a loan, through assessing options to repay student loan debt after graduation.

The answer is: No, Yes, No – in that order.

In 2015, 10.2 percent of U.S. students were assessed as proficient at level 5, the highest level.

Question level: 5

At level 5 students can apply their understanding of a wide range of financial terms and concepts to contexts that may only become relevant to their lives in the long term. They can analyze complex financial products and can take into account features of financial documents that are significant but unstated or not immediately evident, such as transaction costs. They can work with a high level of accuracy and solve non-routine financial problems, and they can describe the potential outcomes of financial decisions, showing an understanding of the wider financial landscape, such as income tax. 

Nature of the task

Evaluate a potential financial fraud and respond appropriately to a financial scam e-mail message. Calculations are not required in this item. 

The context is societal. The question belongs to the financial landscape content, because Internet banking is part of the broader financial landscape in which students are likely to participate, either now or in the near future.

Financial literacy process

The process is evaluate financial issues because students must evaluate the presented options and recognize which piece of advice can be considered as good advice.

Tools to help you develop this proficiency

Take control of your auto loan - This tool helps people to shop for and compare financing options when purchasing a vehicle, look beyond the monthly payment and consider the total cost of financing when choosing an auto loan, and be aware of situations and financing features that could lead to costly surprises down the road.

Checklists and guides - We’ve created a range of publications for consumers that provide straightforward information about money management and other financial issues. These publications include brochures about checking a credit report, avoiding checking account fees, tax time savings, how to avoid foreclosure, what to do when unable to pay credit card bills, and other topics. The CFPB makes many of these resources available in English and Spanish, as well as eight other languages, and provides them for download or bulk ordering.