Only 24% of Millennials Are Financially Literate — If You Can Pass This Test, You Are, Too

Woman Doing Finances


AnnaMarie Houlis
AnnaMarie Houlis4.87k
Journalist & travel blogger

A wealth of research suggests that most millennials struggle with their finances, including basic financial discourse. As such, most millennials won't be able to answer this quiz.

Only 24 percent of millennials demonstrate basic financial literacy, according to a study from the National Endowment for Financial Education. Perhaps that's why about 77 million Americans with credit (35 percent of adults) have debt in collections, according to the Urban Institute, and why nearly one-third of Americans pay just the minimum amount due on their credit card bills each month, according to FINRA's National Financial Capability Study.

Women worry about their finances even more than men, as research from online lender Laurel Road suggests that many women lack financial education, discal confidence and savings accounts. Women (37 percent) are about twice as likely as men (20 percent) to not have any retirement savings, and they save $123,000 less on average. As such, only 66 percent of women report having an emergency fund, versus 82 percent of males.

If you know the following 15 questions on fundamental concepts of economics and finance — without scrolling down to the answers first! — you may be able to save yourself from becoming apart of the aforementioned statistics.

Can You Answer These 15 Financial Literacy Questions?

1. True or false: A 10-year mortgage usually requires higher monthly payments than a 20-year mortgage, but the total interest over the loan life is less.

2. If interest rates rise, do bond prices rise, fall, stay the same or is there no relationship?

3. What is the average annual rate of inflation for college tuition across the United States?

4. You have $100 in a savings account earning two percent interest a year. After five years, how much money have you saved?

5. On average, how many more years can a typical 65-year-old woman can expect to live? 

6. Does buying a single company's stock typically provide a safer return than buying a stock mutual fund?

7. How often can you get yourself a free credit report?

8. The interest rate on your savings account is one percent a year, and inflation is two percent a year. After one year, does the money in your savings account buy more, less or the same than it does today?

9. How much can you typically expect to spend on out-of-pocket costs for health care throughout retirement (in today's dollars), if you retire at age 65?

10. You owe $1,000 on a loan, and you're charged a 20 percent per year interest rate, compounded annually. If you haven't yet paid anything off, at this interest rate, how many years would it take for the $1,000 to double?

11. What is considered an excellent credit score?
12. True or false: You took out a loan to pay for a car, but you defaulted your loan. Only this lender will know about it and, if you need another loan, you'll easily be able to get it from another lender.
13. Is it okay to skip payments on your bills only some months, so as long as you pay the next month?
14. What are the advantages of enrolling in your employer's 401(k) or another retirement plan?
15. What is the recommended ideal percentage of your monthly salary that you should contribute to your 401(k) plan to retire at a reasonable age with enough savings?


  1. True
  2. Fall
  3. According to The College Board, the average 2014-2015 tuition increase was 3.7 percent at private colleges; it was 2.9 percent at public universities. Learn more here.
  4. More than $102.
  5. The average 65-year-old women will live until 85, according to Social Security Administration data. This means she can expect to live another two decades.
  6. No
  7. Under federal law, you are entitled to a free copy of your credit report from all three credit reporting agencies (Experian, Equifax and TransUnion) once every 12 months. And you should check your credit reports from each of the three bureaus annually.
  8. Less
  9. According to the Fidelity Retiree Health Care Cost Estimate, "an average retired couple age 65 in 2019 may need approximately $285,000 saved (after tax) to cover health care expenses in retirement." That said, this amount will always depend on when and where the couple retires, how healthy they are and how long they live.
  10. Two to four years
  11. A score of 800 or above is considered excellent, according to Experian. Though, most credit scores fall between 600 and 750. Learn more here.
  12. False
  13. No
  14. You can invest and save even more. Learn more here.
  15. "Most financial planning studies suggest that the ideal contribution percentage to save for retirement is between 15 and 20 percent of gross income," according to Investopedia. Learn more here.

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AnnaMarie Houlis is a feminist, a freelance journalist and an adventure aficionado with an affinity for impulsive solo travel. She spends her days writing about women’s empowerment from around the world. You can follow her work on her blog,, and follow her journeys on Instagram @her_report, Twitter @herreportand Facebook.