Managing your money quiz

Managing your money iconTake this quiz to see how much you know about managing your money. Test your knowledge.

There are ten questions. Select an answer to receive feedback. Your score is calculated at the end. 

Clock Estimated time: 5 mins

credit cardsMarina is planning a holiday that will cost around $5,000. She has a new credit card with a $5,000 limit. Should Marina:

  • Use her credit card to pay for the holiday and pay it off after she gets back
  • Save for her holiday even if it means taking it a bit later

 


That's right. Credit cards charge a high interest rate so you are usually better off to save for things like a holiday. It will be cheaper in the long run as you won't pay interest on it and you will enjoy it more knowing you worked for it.

See saving for a holiday for more information.

Incorrect. If Marina uses her credit card to pay for her holiday and doesn't pay off the balance she will have to pay high interest on her debt. That will increase the cost of her holiday.

See saving for a holiday for more information.

carAmy lives 25 kilometres from work and is thinking about buying a car. She doesn't like public transport and it will take her the same amount of time to get to work by car as it does by train. It costs Amy $40 a week on the train and she estimates around $70 a week to fill up a car.

How much money would Amy save each year if she continues to catch the train to work instead of buying a car and driving?

  • $1,560
  • $3,120
  • $5,000

That's right! Based on average operating costs that include registration, fuel, tyres, service and repairs, insurance and depreciation.
 
See buying a car for more information.

Not quite right. Amy would spend $30 more each week on petrol but this is not the only cost of owning a car. Taking all associated costs into consideration, a small car will cost Amy about $7,000 a year, which is $5,000 a year more than it currently costs her to catch a train.

See buying a car for more information.

piggybank in houseAlex has just completed major home renovations and her home is now worth 20% more than the amount it's insured for. How much do you think it will cost to increase the amount of her home building insurance?

  • Alex will have to pay a small increase in her premium, but not as much as 20% more
  • About 20% more, because Alex is getting 20% more cover

That's right. If you want 20% more cover, it will not usually cost you 20% more premium - in fact, it can be significantly less. Get a quote from your insurer and don't be afraid to shop around and compare policies and prices of other insurers.

See home and contents insurance for more information.

Incorrect. You generally won't have to pay a 20% increase on your premium to get 20% more cover. Get a quote from your insurer and don't be afraid to shop around and compare policies and prices of other insurers.

See home and contents insurance for more information.

moneybagsIf Laura deposited $20 a week in a high interest savings account with an interest rate of 4% for her newborn son, how much money would he have when he turns 21?

  • About $34,000
  • About $27,000
  • About $21,000

That's right. What a way to set up your children for life!

Use our compound interest calculator to see how much you could save.

Actually it's closer to $34,000. That's the magic of compound interest.

Use our compound interest calculator to see how much you could save.

MHC-house-calculatorChloe and Grant are saving to buy a house and hope to have a deposit within the next 5 years. Where is the best place to grow their deposit?

  • An online savings account
  • A managed share fund

That's right. Because their savings timeframe is fairly short they may not have time to recover from market fluctuations. An online savings account will pay them interest and protect their capital, giving them the flexibility to access their money as soon as they are ready to buy a home.

For more information see saving for a home.

Incorrect. An investment in shares, whether directly or through a managed fund, needs a longer investment timeframe in order to ride out fluctuations in the market. This type of investment is suitable for people who don't need to access their money for at least 7 years.

For more information see saving for a home.

globeSam bought clothes from an American website but when he received his credit card statement, he found an unexplained charge of US$80. Can Sam get his $80 back?

  • No
  • Yes

That's right. Sam should immediately contact his credit card company, report the unauthorised transaction and ask for it to be reversed. .

See unauthorised and mistaken transactions for more information.

That's wrong. Sam should immediately contact his credit card company, report the unauthorised transaction and ask for it to be reversed.

See unauthorised and mistaken transactions for more information.

piggybank in house

You're about to take out a home loan and your lender has told you that you need to pay mortgage insurance. Would this insurance protect you if you were unable to keep up with repayments?

  • Yes
  • No

No, it would not. Mortgage insurance protects your lender against the risk that you will not repay your loan. The insurer will pay out your lender, but is then entitled to chase you for the money. If you can't pay, the insurer can sell your home to repay the debt or even sue you if the proceeds from the sale of your house are not enough to pay back the loan and other selling costs.

For more information see buying a home.

That's right. Mortgage insurance simply protects your lender against the risk that you will not repay your loan. The insurer will pay out your lender, but is then entitled to chase you for the money. If you can't pay, the insurer can sell your home to repay the debt or even sue you if the proceeds from the sale of your house are not enough to pay back the loan and other selling costs.

For more information see buying a home.

suitcaseAdrian organises travel insurance for his trip to Hanoi. A few years ago he hurt his knee playing football and needed to have surgery. Does he have to tell his insurer about this?

  • Yes
  • No

Absolutely! If something goes wrong and Adrian hurts his knee while he is overseas, the insurer may not cover his claim because he did not disclose his pre-existing medical condition. To make sure you are properly insured when travelling, you must be honest about your medical history.

See travel insurance for more information.

That's incorrect. If Adrian hurts his knee while he is overseas, the insurer may not cover his claim because he did not disclose his pre-existing medical condition. To make sure you are properly insured when travelling, you must be honest about your medical history.

See travel insurance for more information.

piggybank in waterIf you are struggling with your debts, refinancing will get you back in control.

  • Yes
  • Not necessarily

That's right! Refinancing is not always suitable and can be a short-term fix to a long-term problem. You may also be charged additional fees to refinance which could put you in even more debt.

For more information see debt consolidating and refinancing.

Not necessarily! Refinancing can be a short-term fix to a long-term problem. You may also be charged additional fees when you refinance which could put you in even more debt.

For more information see debt consolidating and refinancing.

piggybank with bandaidGeoff received his bank statement in the mail and noticed he had been charged account fees twice. He made a complaint to his bank and after a month he had still not heard back from them. What should Geoff do?

  • Continue to wait for the bank's response
  • Take his complaint to an external dispute resolution scheme

That's right! The bank should have responded to Geoff within a reasonable timeframe. External dispute resolution (EDR) schemes hear complaints for free and can be a simpler alternative to resolving disputes in court.

For more information see how to complain.

That's incorrect. The bank should have responded to Geoff within a reasonable timeframe. He should take his complaint to his bank's external dispute resolution (EDR) scheme. EDR schemes hear complaints for free and can be a simpler alternative to resolving disputes in court.

For more information see how to complain.

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Last updated: 26 Jul 2016