I think it’s time to go back to school. Well, you don’t actually need to jump on the school bus, get a new school bag, lug around about 10 pounds of paper and highlighters and dodge spit balls, but I think it is time for us to get some personal finance help. Here is a short quiz that you can zip through to discover if you know your finances.
1. It’s always better to choose the longest amortization term with your mortgage because you’ll pay less each month.
2. There’s actually no difference on the amount of interest you’ll end up paying over the length of your mortgage if you contribute once a month or twice a month.
3. What is a dividend?
a. A cash rebate traded among lenders
b. A payment of additional shares of stock to stockholders
c. A monetary bonus for employees
d. The opposite of multiplication
4. What is the best financial tool at your disposal?
a. Planning a household budget
b. Using a computer for your taxes
c. Always keep your checkbook in balance
d. Seeking personal finance help from a professional
5. Do you know what as asset is?
a. A car, laptop or clothing
b. It is cash, property or stocks
c. Anything owned that has exchange value
d. All of the above
1. b – False
It’s incredible how much interest you end up saving if you lessen the amount of time over which you pay a mortgage. Try making a larger payment each month so you can save save thousands upon thousands of dollars. The more quickly you can pay it off, the better.
Amortization period Monthly payment Total interest over the lifetime of the mortgage
35 years $565.25 $137,408
25 years $639.81 $91,940
20 years $712.19 $70,925
Amount saved with a shorter amortization period — $66,483
2. b- False
By making your mortgage payment once every two weeks or twice a month you will eliminate your mortgage much faster. In fact it ends up being an extra payment per year. If you are more of a number person, this chart will create a little better understanding and provide a little personal finance help.
3. b – A payment of additional shares of stock to stockholders
A lot of people who dabble in stocks only choose stocks that pay in additional shares to stockholders. Imagine you had taken dividends as your stock option when Microsoft or Apple were in their infancy? Plenty of investors did and made a fortune.
4. a – Planning a household budget
All of the options in question are important financial aides to use but the most important one is planning a household budget. It is wise to understand where all of your money is headed and how much remains to spend and save. Always make a household budget if you want to keep track of your finances.
5. d – All of the above
This one may have fooled you but an asset by definition is ‘anything owned that has exchange value’. In short an asset can be anything. Certainly many assets are better investments than others (like property or stock options) but even the slow old laptop that your parents bought for you when you headed off to college is an asset.
I trust this quiz was fun and gave you some of the personal finance help you deserve. You have to stay on top of your cash and learn as much about your finances as possible. The more informed you are chances are you will achieve your financial goals. I know you have already created a number of financial goals.
Cheers until next time!
DID YOU LIKE THIS ARTICLE? SHARE IT WITH FRIENDS!