New Visitors Privacy Policy Sponsorship Contact Us Media
Baby Boomers Family Green Home and Auto In Critical Condition Just Starting Out Lifestyle Money
- advertisement -
Bankrate.com
News & Advice Compare Rates Calculators
Rate Alerts  |  Glossary  |  Help
Mortgage Home
Equity
Auto CDs &
Investments
Retirement Checking &
Savings
Credit
Cards
Debt
Management
College
Finance
Taxes Personal
Finance

Are you a teen-age money dummy?

Test your financial IQ

Bones, flow, bucks, cash ... You can earn it, you can spend it, but do you know how to save it or charge it? The financial experts (read: adults) say your generation earns a failing grade when it comes to understanding how money works. Prove them wrong! Test your financial IQ.

  1. If you don't have enough money to invest, what's the best spot to keep extra cash?

    A savings account. I've had one since I was 6 and it's easy to keep track of my money.
    A money market account. It pays a higher interest rate and I can get my money any time I want it.
  2. It's Saturday night and I need cash. I'm not near any of my bank's ATMs. What should I do?

    Go to a supermarket and buy some breath mints.
    Go to the nearest ATM and get some money.
  3. I need a checking account. Does it matter where I open one up? Aren't they all pretty much the same?

    You bet. A checking account is a checking account. Convenience is the name of the game. Find a bank close to home or school -- just make sure they have some cool check designs.
    Checking accounts vary greatly. Some will eat you alive with fees. Be very careful about where you open an account.
  4. You just got an after-school job. Your tax responsibility to Uncle Sam is:

    None! You still live at home, so your taxes are covered when mom and dad claim you on their tax return.
    You don't have to file anything because taxes are taken care of by the unreasonably large amount of money withheld from your paycheck.
    Withholding probably covers what you owe, but you need to file a return to get any possible refund.
  5. That job you got was at the fanciest restaurant in town and the patrons sure are big tippers. How much of this outside-your-paycheck money do you have to report to the IRS?

    None of it. Tips aren't taxed.
    All of it. Tips count as income just like that paycheck.
    Only those tips that are more than $20.
  6. Lucky you. You didn't have to work, in part because that stock fund Grandma gave you is paying out big time! But you do have to tell the IRS about this money because:

    You received $800 in dividend checks.
    You don't have to report it because the earnings were reinvested.
    You don't have to report it because the IRS just taxes wage income.
  7. You've saved enough money to buy a car. But, yikes, you just found out how much you'll have to pay to insure it. What can you do to lower an auto insurance bill?

    Nothing. It is what it is.
    Maintain a ''B'' average or better in school.
    Be a safe, accident-free, ticket-free driver.
    Sign up as an addition to your parentsí insurance policy instead of getting your own policy.
    b, c and d
  8. What is a credit card credit limit?

    Your ticket to the good life
    The amount a credit card issuer is willing to lend you.
    The absolute highest dollar amount you can charge without being slapped with a fee.
    b and c
  9. How long would it take to pay off a $1,000 credit card balance at 18 percent if you just pay the minimum payment amount which is generally 2.5 percent of your balance?

    3 years
    5 years
    7 years
    12 years, 9 months
  10. You apply for a credit card and you are turned down. The rejection letter explains that you didn't get the card because your car was repossessed due to nonpayment, and you are frequently late paying your Sears card. The weird thing is that you've never had a car loan or a Sears card. What do you do?

    Order a copy of your credit report and send a letter to the credit bureau, pointing out which items are erroneous and asking for them to be corrected. Once that is done, re-apply for the card.
    Order a credit report and send a copy of it to the credit card issuer that rejected you, highlighting which items on the credit report are erroneous. Ask to be reconsidered for a card, based on the correct information.
    Since each inquiry counts against your credit ratio, wait a few months for your credit report to clear the underwriting process. After all your liens have aggregated, apply for the card again.

-- Posted: May 14, 2002

top of page
See Also
Credit card issuers target teens
Six steps for teaching teens to manage money

Print   E-mail

Credit Cards
Compare weekly rates
WEEKLY AVERAGES
Type Fixed Variable
Standard 13.23% 14.86%
Gold
Platinum 12.70% 15.95%
All 13.02% 15.66%



RELATED CALCULATORS
  Loan calculator (includes amortization schedule)  
  See your FICO score range -- free  
  What will it take to pay off your credit card?  
VIEW ALL 

BASICS SERIES
Credit Card Basics
Don't get trapped by card debt. Learn to use it wisely.
How to find the best card
Check your credit report
Finance charges explained
How to ask for a lower rate
Improve credit with a card
How to repair your credit

MORE ON BANKRATE
Banking glossary  
News archive  
Keep an eye on the leading rates  
Find a high-yielding CD


- advertisement -

 
- advertisement -

About Bankrate | Privacy Policy/Your California Privacy Rights | Online Media Kit | Partnerships | Investor Relations | Press Room | Contact Us | Sitemap
NYSE: RATE | RSS Feeds |

* Mortgage rate may include points. See rate tables for details. Click here.
* To see the definition of overnight averages click here.

Bankrate.com ®, Copyright © 2014 Bankrate, Inc., All Rights Reserved, Terms of Use.