Financial Literacy Quiz: 10 Questions to Challenge Your Money Smarts

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April is Financial Literacy Month, and if there's one thing we know for sure, it's that educating Americans about how to manage their money can't start early enough. In a recent survey of international women's financial literacy commissioned by Visa, the U.S. ranked last among 27 countries when it came to the question: "To what extent would you say that teenagers and young adults in your country understand money management basics and are adequately prepared to manage their own money?" Only 17% of respondents expressed any confidence that young people starting out understand financial basics.

Of course, teaching by example is one of the surest ways to get kids to learn. Here are 10 money questions to challenge your basic knowledge about managing finances. Find an area you need to brush up on? Visit the new DailyFinance Learning Center, where you can take interactive courses on personal finance topics, including how to teach your kids about money.

Financial Literacy Quiz: 10 Questions to Challenge Your Money Smarts
A. 50 percent
B. 43 percent
C. 31 percent
Whether you rent or buy, it's best to keep your housing costs at a maximum of 31 percent.
A. Close old credit card accounts you no longer use.
B. Pay down your debt to at least 25 percent or less of each credit card limit.
C. Consolidate your debt on one balance-transfer credit card.
Canceling a credit card account could cause your credit score to decline because it lowers the overall available credit you have been granted. And while a balance transfer may help you pay your debt faster, watch out: Your credit score could go down if the money you transfer maxes out that single credit card.
A. Once per year.
B. Only when you've been turned down for a loan or credit card.
C. Three times per year.

If you are denied credit based on something in your credit history file, you are eligible for a free credit report from the reporting bureau used. However, regardless of your credit activity, you can get one free credit report each year from EACH of the three credit reporting agencies (Experian, TransUnion and Equifax). You ca access your free credit report at www.annualcreditreport.com.

A. $1,000
B. Two months of rent or mortgage payments
C. Six months of living expenses
While the amount varies according to your living costs, your other assets, and whether you are a one- or two-income household, a good starting place for emergency savings is having enough to cover six months of living expenses.
A. A single mother with two young children
B. A two-income married couple without children
C. An elderly widow
Life insurance is essential for someone who is the sole income provider for a family. So, while the others may want life insurance to provide for family members, the single mother needs the most protection for her children in the case of her death.
A. Your current credit card balance
B. Your payment history
C. Your income
Credit reports do not take into account your income.
A. Jane, who makes the minimum payment on her credit card bill every month.
B. Joe, who pays the balance on his credit card in full every month.
C. Joyce, who sometimes pays the minimum, sometimes pays less than the minimum, and missed one payment on her credit card bill.
Skipping a payment -- or paying less than the minimum amount due -- is likely to cause your credit card company to raise your interest rate. Paying only the minimum will also result in paying large amounts of interest over time.
A. Pay your bills on time.
B. Hire a credit repair company.
C. Cancel your credit cards.
Cancelling your credit cards won't help because the balance owed and your payment history will stay on your credit report. A credit repair service cannot fix accurate negative information. Only time -- and a consistent ongoing payment record -- can fade the impact of negative information.

A. Certificate of deposit.

B. Checking account.

C. Money market account.

In general, most CDs limit your withdrawals to the end of the CD term; money market accounts allow only six withdrawals per month; and you can get money from a checking account as many times as you want. However, rules can vary from institution to institution. So know the terms on your account to avoid getting socked with a surprise fee.

A. Tom saves $1,000 per year from age 25 to 35 in an account earning 8 percent interest and then stops saving.
B. Tracy saves $1,000 per year from age 35 to 65 in an account earning 8 percent interest.
C. Both the same.
Surprise! Even though Tom invested only $10,000 and Tracy saved $30,000, Tom comes out ahead in this savings scenario with $169,000 in his account compared to Tracy's $125,000. That's because Tom's money had a longer time to grow. That's the miracle of compound interest in action.
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