Find out if you have the financial knowledge you need to manage your money and investments well… or if you could benefit from some advice. Here is a test that will allow you to know your level of financial literacy.
Did you know that November is Financial Literacy Month in Canada?
For ten years, Financial Literacy Month has been helping people better understand their finances. It aims to equip them so that they can:
manage their money and debts wisely;
put money aside for retirement;
know their financial responsibilities and rights.
In addition, times are tough for many households. Many are struggling to make ends meet due to the COVID-19 pandemic. Nearly half of Canadians feel their finances are more precarious due to the crisis. That’s why it’s essential to understand your finances.
How do I get financial help and save amid the coronavirus (COVID-19) pandemic?
What are the effects of the coronavirus on your savings?
Coronavirus (COVID-19) and your savings plan: what to do?
What is Financial Literacy?
Financial literacy is a person’s knowledge of financial concepts and how they use them. Here are some examples :
Budgeting
Investments
Money management
Short and long term planning
Income protection
retirement planning
Why is financial literacy critical?
It’s straightforward: the more you know about personal finance products, practices, and concepts, you can make better decisions.
Financial literacy is about understanding various financial terms and how the underlying concepts might be helpful to you.
Take the Financial Literacy Quiz
Financial Literacy Month 2020 has the following objective: to help Canadians manage their finances and make informed decisions well adapted to their situation. These abilities are all the more important during a difficult time.
Here is a short questionnaire* that will allow you to assess your financial knowledge. Choose the statement that you think best answers each of the following questions. Then, compile your correct answers to find out your level of financial literacy.
- What can influence the amount of interest payable on a loan?
a) Credit score
b) The amount borrowed
c) The time required to repay the loan
d) All of the above
- What can affect the credit rating?
a) Making a late payment on a loan or other type of debt
b) Holding a job too long
c) Living in the same place too long
d) Use your credit card frequently
- What lowers the cost of a house?
a) Paying off the mortgage over a long period
b) Choose to pay mortgage interest at the current rate for as long as possible
c) Pay a more significant down payment
d) Pay a smaller down payment
- What is a credit file?
a) A list of a person’s assets and liabilities
b) A monthly credit card statement
c) A person’s loan and bill payment history
d) A line of credit established with a financial institution
- Suppose the following four people have the same net salary. Who will need the most life insurance?
a) A young single mother of two young children
b) A young single woman without children
c) A retired older man, whose spouse is also retired
d) A young married man without children
- You can easily compare the cost of products of different brands or formats at the grocery store, thanks to the unit price.
actually
b) False
- If the inflation rate is 5% and the interest rate paid on your savings is 3%, your savings will have at least the same purchasing power a year from now.
actually
b) False
- Do you pay tax on investment income from a registered retirement savings plan (RRSP)?
a) Yes, the same rules apply to registered and non-registered investments.
b) Yes, but only when withdrawing funds from the RRSP.
c) No, we only pay tax on contributions that exceed the annual maximum allowed.
d) No, investment income is not taxable.
- What are “capital gains”?
a) Income earned in a given taxation year
b) Profits made on the sale of investments
c) Interest paid on guaranteed investments
d) Annual salary increases
- What is a payout annuity?
a) An annual dividend payment
b) An annual payment of
