Assessing Your Financial Literacy

By Chris Duderstadt

April 2, 2024

Assessing Your Financial Literacy

Key Points – Assessing Your Financial Literacy

  • April Is Financial Literacy Month
  • How Do You Think Your Financial Literacy Stacks Up to Two of Our Managing Directors?
  • Reviewing Some Eye-Popping Financial Literacy Statistics from a 2023 Zippia Study
  • See How You Do on FINRA’s Financial Literacy Quiz and How Many Yeses You Get on Our Retirement Plan Checklist
  • 4 Minutes to Read | 23 Minutes to Watch

It’s Financial Literacy Month

April is an important month in the wealth management industry, especially with Tax Day coming up on April 15. Taxes are one of our financial planning pillars at Modern Wealth Management, and they play a big role in the other three pillars—estate planning, investment management, and risk management. If you took a financial literacy quiz that covered all four pillars, how do you think you would fare?

Well, we’re glad you asked. It’s a fitting time to take such a quiz considering that April is Financial Literacy month.1 On this episode of America’s Wealth Management Show, Dean Barber and Bud Kasper, CFP®, AIF® are going to take FINRA’s seven-question financial literacy quiz.2 Do you think that you, Dean, and Bud can all ace it?

Schedule a Meeting Get the Retirement Plan Checklist

Some Startling Financial Literacy Statistics

Before starting the quiz, we want to share some staggering financial literacy statistics with you from a 2023 Zippia study.3

  • Just 57% of American adults are financially literate.
  • On average, Americans lose more than $1,800 each year from being financially illiterate.
  • 25% of American adults don’t feel like they have anyone they can trust for financial guidance.
  • Only 20 states require high schools to teach financial literacy as a part of their curriculum.

The lack of financial education gives each member of our team plenty of motivation to go to work each day. We’re not going to try to sell you any type of financial product or investment. We simply want to empower you so that you have confidence that you’re doing the right things with your money, freedom from financial stress, and time to spend doing the things you love. That all comes from financial education and having a forward-looking financial plan that takes you to and through retirement.

It’s Quiz Time

We hope that you’re able to answer all these questions correctly, but if not, don’t fret. We’re here to help you understand the many nuances of financial planning so that you can have more confidence, freedom, and time. Let’s review these seven financial literacy questions from FINRA, and then we’ll share the answers at the end.

1. Suppose you have $100 in a savings account earning 2% interest a year. After five years, how much would you have?

A. More than $102

B. Exactly $102

C. Less than $102

D. Don’t know

2. Imagine the interest rate on your savings account is 1% a year and inflation is 2% a year. After one year, would the money in the account buy more than it does today, exactly the same, or less than today?

A. More

B. Same

C. Less

D. Don’t know

3. If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship?

A. Rise

B. Fall

C. Same the same

D. No relationship

E. Don’t know

4. True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage, but the total interest over the life of the loan will be less.

A. True

B. False

C. Don’t know

5. True or false: Buying a single company’s stock usually provides a safer return than a stock mutual fund.

A. True

B. False

C. Don’t know

6. Suppose you owe $1,000 on a loan and the interest rate you are charged is 20% per year compounded annually. If you didn’t pay anything off, at this interest rate, how many years would it take for the amount you owe to double?

A. Less than two years

B. Two to four years

C. Five to nine years

D. 10 or more years

E. Don’t know

7. Which of the following indicates the highest probability of getting a particular disease?

A. There’s a one in 20 chance of getting the disease.

B. 2% of the population will get the disease.

C. 25 out of every 1,000 people will get the disease.

D. Don’t know

Answer Key

  1. A
  2. C
  3. B
  4. A
  5. B
  6. B
  7. A

How Does Your Financial Literacy Stack Up?

So, how did you do? The national average on this quiz is only 3.2 correct answers. There was also a higher national average for questions people didn’t know the answer to (2.1) compared to incorrect answers (1.6). Still, we want to make sure that you can answer all seven correctly.

If we’re being honest, those seven questions were rather simplistic. The FINRA quiz touched on some key aspects of wealth management, such as inflation, interest, interest rates, and investments. But when you dive into other some of the wealth management components, there is subject matter that can be much more complex.

If there was a quiz on the various provisions within the SECURE Act and SECURE Act 2.0, that would likely be much more difficult than FINRA’s quiz. But answering those questions incorrectly could lead to decisions that negatively impact your ability to get to and through retirement. That’s why it’s critical to work with a team of professionals that specializes in taxes, risk management, estate planning, and investment management.

Further Assessing Your Financial Literacy (and Ability to Retire Successfully) with Our Retirement Plan Checklist

To truly gauge your ability to retire successfully, download our Retirement Plan Checklist. It consists of 30 yes-or-no questions and age-and date-based timelines that go over several key retirement planning considerations. Download your copy below.

Financial Literacy

Retirement Plan Checklist

Do You Have Any Questions for Us?

Between FINRA’s financial literacy quiz and our Retirement Plan Checklist, we’ve asked you quite a few questions. And we understand that you may have some follow-up questions about what those questions covered and how they relate to your unique situation. We don’t want you to answer “don’t know” to any financial literacy-related question, so we encourage you to start a conversation with our team below.

Schedule a Meeting

As you’re going through the financial planning process, understand that the right answers for your best friend might not be the right answers for you. And that’s OK! Your goals, earnings history, risk tolerance, and so many other variables are likely going to be different from theirs. We’re ready to build you a personalized financial plan that can help you gain more confidence, freedom, and time.

Assessing Your Financial Literacy: Watch Guide

00:00 – Introduction
01:34 – Dean Grills Bud on Financial Literacy
04:43 – Retirement Literacy
07:20 – FINRA’s Financial Literacy Quiz
17:38 – More Startling Statistics
– What We learned Today


Past Shows


Other Sources




Investment advisory services offered through Modern Wealth Management, LLC, an SEC Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.