Heritage Oak School

04/20/2019 | News release | Distributed by Public on 04/20/2019 14:39

Can My Graduate Manage Finances? Take the Quiz

When we talk about preparing for college financially, we tend to think of college saving accounts, scholarships and the financial aid packages. But even as we save and seek out ways to help the family finances, too often we neglect preparing our student of financial independence. Take this quiz below to gauge your high school student's preparedness for financial independence.

  1. When asked to define a budget, your student would respond:
    1. What's a budget?
    2. I don't know how to budget, but I know what one is.
    3. I know what my monthly expenses are
    4. I routinely budget into three or more categories.
  2. When asked about tithing, your student would respond:
    1. What's a tithe?
    2. I don't earn any money
    3. I tithe regularly on my income
    4. I understand the Biblical rationale behind tithing and the associated arguments for various percentages.
  3. Your student's work history is composed of:
    1. Eating pizza and hanging out with friends
    2. Occasional household chores
    3. Occasional out of the work home (paid pet sitting, babysitting, weed-whacking)
    4. Seasonal regularly scheduled work (farm labor, summer camp, lifeguarding)
    5. Year-round regularly scheduled work (Walmart, Restaurant, etc)
  4. The largest purchase your student has ever made with his/her own money (excluding college….)
    1. $10
    2. $25
    3. $100
    4. $500
    5. $1000+
  5. Your student, when asked about a fully funded emergency fund, he/she responds by stating:
    1. What's an emergency fund?
    2. Why do I need one, when I have you?
    3. $1000
    4. 1 month of expenses
    5. 3-6 months of expenses
  6. Your student, when asked to explain good reasons for debt, responds:
    1. It's the American way!
    2. Only a good idea if you can pay it off
    3. Good for large purchases because of the perks associated with credit cards (airline miles, 'points' etc)
    4. A form of slavery (Proverbs 22:7: The rich rules over the poor, and the borrower is the slave of the lender.)
  7. You ask your student to demonstrate his or precocious math skills by solving this very practical word problem: you finally are earning enough money to start paying back student loans six years after graduating college. How much money do you owe in 10 years if you borrow $100,000 at 10% interest compounded annually:
    1. I'll declare bankruptcy, I hate math
    2. Approx. $110,000
    3. Approx. $210,000
    4. Approx. $260,000
  8. When asked about identity theft, your student responds:
    1. I love that show!
    2. My iPhone and iMac are protected by Apple
    3. No one can steal your identity if you don't share your passwords
    4. I know how to contact credit bureaus and freeze my credit
  9. Your student responds, when asked which car is the most affordable:
    1. The one with the most dealer cash back!
    2. New cars are an investment for the future
    3. The one with the lowest interest rate.
    4. The most affordable car is the one I already own outright
  10. When asked about car insurance, your student responds:
    1. Unnecessary, as long as you don't get pulled over. What a waste of money!
    2. The minimum necessary insurance to meet legal requirements.
    3. Important because it can save your finances if you hit someone or someone hits you
    4. Articulates the difference between liability, comprehensive coverage and the relationship between a deductible and monthly insurance cost.
  11. Regarding student loans, your student responds by stating,
    1. Positive good. These will help me attend my dream school so I can study underwater basket weaving or concert clarinet performance or another fulfilling yet low paying job!
    2. Neither bad nor good. I must have them so I don't have to work my way through school and enjoy time with my friends.
    3. Necessary evil. I wish I didn't have to take them, but I must have them so I can achieve my goal of a high paying career. I will have them paid off within 5 years of graduation based on my college degree's earning potential.
    4. Slavery. They cannot be discharged in bankruptcy and will begin accruing interest my first day of class (see question 7). I won't rely on them by working part time and minimizing my expenses.

Now go ahead and score it!

10-20: Failing with an F; Financially illiterate and in danger of attending the University of Hard Knocks; Better obtain a basic financial education now.

20-25: Failing with a D; functionally financially immature and liable to make some pretty major mistakes

25-35: Passing with a C; Financially literate enough to avoid some major mistakes. Will only need remedial financial lessons.

25-35: Meeting expectations with a B; Savvy and likely to avoid almost all major mistakes. Unlikely to inhabit your basement after college graduation

40+: Excelling with an A; Prepare to be amazed! This financial whiz kid is the head of her class!

So now that you've taken our quiz, we hope that your student earned a B or an A. This quiz illustrates the general low level of financial literacy in our society today. It serves to remind us that we often fail to teach our students the basics of managing their money so that they can be financially independent. Teaching this financial literacy to our children enables them to pursue their own purposes without the burden of student debt or an unsustainable lifestyle. Without the burden of debt, we can pursue God's purpose for our life with financial freedom and help our children do the same.