Financial Literacy Test
Eighteen questions on the parts of money that actually decide outcomes: compounding, costs, risk, debt, inflation and net worth. You get a score out of 100, a breakdown by topic, and the one topic worth reading up on next.
1Compounding
You invest 1,000 at 7% a year and add nothing. Roughly how long until it doubles?
A invests 200 a month from age 25 to 35, then stops. B invests 200 a month from 35 to 65. Same return. Who usually ends up with more?
Over a lifetime, which does the most to grow a portfolio?
Your literacy score
Answer all eighteen questions to unlock your score.
Compounding–
Fees and costs–
Risk and diversification–
Debt–
Inflation–
Net worth–
How it works
How to use this test
1
Answer eighteen questions
Six topics, three questions each. Every answer shows you why it is right or wrong straight away, so the test teaches as you go rather than only at the end.
2
Get your score out of 100
Each question is worth the same. The gauge shows your total and the band it falls in, from starting out through to strong.
3
Read the topic breakdown
Six bars, one per topic. A perfect total hides nothing, but most people score well on one or two topics and poorly on another, and that gap is the useful part.
4
Fix your weakest topic
The result points at the step of our financial literacy guide that covers your weakest area, with a calculator you can run on your own numbers.
The ideas behind it
Key concepts
Compounding
Returns earning their own returns. It is slow at first and then decisive, which is why starting a decade earlier beats contributing twice as much later.
The rule of 72
Divide 72 by an annual rate to get the years to double. It works for growth and against you for inflation and debt, which is what makes it worth memorising.
Total expense ratio (TER)
The yearly cost of holding a fund, deducted continuously from its value. You never receive a bill, which is exactly why it goes unnoticed.
Fee drag
A 1% yearly fee does not cost 1%. Compounded over thirty years it removes roughly a quarter of the final pot, which is more than most people's total contributions in year one.
Diversification
Spreading exposure, not counting holdings. Thirty stocks in one sector in one country still rise and fall together, so the number of lines tells you very little.
Recovery maths
A 30% fall needs a 43% gain to undo, and a 50% fall needs 100%. Losses are asymmetric, which is the real argument for not taking more risk than you can sit through.
Guaranteed return on debt
Clearing a debt at 19% is a risk-free 19% return. It is the highest certain return available to almost anyone, and it is why debt comes before investing.
Real return
Return after inflation. It is the only version that tells you whether you can buy more than you could last year, and the version most account statements do not show.
Tips
Getting a better score, and a better outcome
Learn the rule of 72 first
One piece of arithmetic answers questions about growth, inflation and debt alike. It is the highest return per minute of study in personal finance.
Check the TER on everything you hold
It takes ten minutes and it is the one cost you can cut without predicting anything. Most people find at least one fund charging several times what an equivalent index fund would.
Look through your funds, not at them
Two funds with different names often hold the same top ten companies. What matters is your total exposure to each company, not how many funds you own.
Rank your debts by rate, not by size
The balance that feels worst is rarely the one costing most. Sort by interest rate and the order to pay them off usually becomes obvious.
Always convert to real terms
Before judging any return, subtract inflation. A 5% return in a 6% inflation year is a loss, even though the balance went up.
Retake this in six months
Knowledge you do not use decays. Retaking a short test is a faster check than rereading, and the topic bars show you exactly what slipped.
FAQ
What is a good financial literacy score?+
Anything from 60 counts as solid on this test and 80 or above is strong. But the total matters less than the breakdown: a 70 made of six even topics is a very different picture from a 70 with one topic at zero, and the second is more urgent to fix.
Is this the same as the financial health score?+
No, and they answer opposite questions. Our financial health score measures your situation, what you own, owe and save. This test measures your knowledge, which is independent of your balance. Plenty of high earners score poorly here, and plenty of people with very little money score highly.
How many questions are in the financial literacy test?+
Eighteen, in six topics of three: compounding, fees and costs, risk and diversification, debt, inflation, and net worth. It takes about six minutes. Each question shows you why the answer is right as soon as you pick, so it works as a short lesson rather than only a test.
Are the questions based on a standard test?+
They are not a reproduction of any official instrument. Academic financial literacy research usually centres on three questions covering compound interest, inflation and risk diversification, and those three ideas are represented here, but we have widened the scope to costs and debt because those are where money is most commonly lost in practice.
Can I share or save my result?+
Yes. Your answers are stored in the page URL, so bookmarking or copying the link preserves your result exactly, and opening it later shows the same score and breakdown. Nothing is sent to us and no account is needed.
Why does one wrong answer cost so much?+
With eighteen questions each one is worth about 5.5 points, so four mistakes moves you a whole band. That is deliberate. The topics were chosen because each one is a common and expensive blind spot, so a gap in any of them is worth taking seriously rather than averaging away.
What should I do if I score badly on fees?+
Look up the TER of every fund you hold and compare it against a broad index fund covering similar ground. Fees are the one input to your returns that is knowable in advance and fully in your control, which makes them the first thing worth fixing. Our fee impact tool shows what the difference compounds to.
Does scoring well mean I will do well with money?+
It helps, but no. Knowing that a 30% fall is normal is different from sitting through one without selling. Research consistently finds that behaviour under stress, not knowledge, explains most of the gap between what funds return and what investors actually earn.
Is the test available in other languages?+
Yes, in English, German, Spanish, French and Portuguese. The questions are the same in every language, so the score means the same thing regardless of which version you take.
How often should I retake it?+
Every six months or so is plenty, or after you have worked through a topic you scored badly on. Retaking it right away mostly measures how well you remember the explanations you just read rather than what you actually know.
Eighteen questions, three in each of six topics, each worth an equal share of 100 points. The topic bars show correct answers out of three. The weakest topic is the one with the lowest share correct, with ties broken in the fixed topic order so a repeated run gives the same answer. Questions are ours, informed by the compound interest, inflation and risk-diversification themes that recur in financial literacy research, widened to include costs, debt and net worth.
18 questions · 6 topics · educational, not financial advice