Know your money: a simple financial snapshot: test your skills
Income, spending, what you own and what you owe — the four numbers every plan starts from. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- List income, spending, assets and debts in one place
- Calculate monthly cash flow and net worth
- Spot which debt costs the most from its APR
- Practice
1. What is net worth?
- Practice
2. Which income figure should a snapshot use?
- Practice
3. Why write each debt’s APR next to its balance?
- Key idea
4. Which statement best explains "Cash flow and net worth answer different questions"?
- Key idea
5. Which statement best explains "Direction beats the starting value"?
- Key idea
6. Which statement best explains "The rate is part of the balance"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
You own $900 checking, $3,100 savings and a car worth $7,000. You owe $2,500 on a card and $6,000 on the car loan. What is your net worth?
Show the answer
$2,500
Owned: $900 + $3,100 + $7,000 = $11,000. Owed: $2,500 + $6,000 = $8,500. $11,000 − $8,500 = $2,500.
Write down every debt you have with its APR. Multiply each balance by its APR and divide by 12. Circle the largest number — that is your most expensive debt.