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MONEY HABITS

How financially literate are you?

8 August 2020

Anybody who’s tried to get their finances under control knows how easy it is to get lost in the jargon. But, knowing your stuff can help to you feel more confident with your finances. Better yet, you don’t need a fancy economics or finance degree to know the basics. Want to test your knowledge? Test your know-how with our financial literacy quiz.

Nice one!

Answer: b) You can usually access your transaction account with a card linked to your account.

Transaction accounts are those that are designed for day-to-day things like groceries, rent and petrol. Savings accounts encourage you to put away money for the long term. As a result, many savings accounts don’t have transaction cards, making it easier to put your money away with dipping into it.

Sorry that is incorrect!

Answer: b) You can usually access your transaction account with a card linked to your account.

Transaction accounts are those that are designed for day-to-day things like groceries, rent and petrol. Savings accounts encourage you to put away money for the long term. As a result, many savings accounts don’t have transaction cards, making it easier to put your money away with dipping into it.

Spot on!

Answer: a) When you take out a new loan to pay off an existing one.

When you refinance your home loan, you look for a new loan to replace your existing one. You can refinance your loan with your existing lender, or look for a new loan with another lender. There are many reasons why you may want to refinance your home loan — perhaps you’re looking to restructure your debts, or just shopping for a better deal.

Sorry that is incorrect!

Answer: a) When you take out a new loan to pay off an existing one.

When you refinance your home loan, you look for a new loan to replace your existing one. You can refinance your loan with your existing lender, or look for a new loan with another lender. There are many reasons why you may want to refinance your home loan — perhaps you’re looking to restructure your debts, or just shopping for a better deal.

Bingo!

Answer: c) The value of your home, minus the amount you still owe on your loan.

In other words, equity is the difference between what your home is valued on the market, and the amount you have left to pay off. Generally, the more you pay off your home loan, the more you’ll increase your equity. You could use it to refinance your home loan, or use it as security to renovate, or even buy a second property.

Sorry that is incorrect!

Answer: c) The value of your home, minus the amount you still owe on your loan.

In other words, equity is the difference between what your home is valued on the market, and the amount you have left to pay off. Generally, the more you pay off your home loan, the more you’ll increase your equity. You could use it to refinance your home loan, or use it as security to renovate, or even buy a second property.

Fantastic stuff!

Answer: c) When you earn interest on the interest of your account balance.

Compound interest is a one of the easiest ways to grow your savings. When you have your money in a savings account, interest is calculated on your closing balance daily. Then, monthly, you’ll earn interest on that interest. The longer you save, and the more you keep depositing, the more compound interest you can earn!

Sorry that is incorrect!

Answer: c) When you earn interest on the interest of your account balance.

Compound interest is a one of the easiest ways to grow your savings. When you have your money in a savings account, interest is calculated on your closing balance daily. Then, monthly, you’ll earn interest on that interest. The longer you save, and the more you keep depositing, the more compound interest you can earn!

Well done!

Answer: a) It can help you pay your home loan quicker by reducing the interest you pay.

If you’re the right financial fit, an offset account can help to shave years off your home loan. As a type of savings or transaction account that’s linked to your home loan, the account balance can be offset against the daily balance of your loan. This means the account balance is subtracted from the home loan amount you have to pay interest on.

Sorry that is incorrect!

Answer: a) It can help you pay your home loan quicker by reducing the interest you pay.

If you’re the right financial fit, an offset account can help to shave years off your home loan. As a type of savings or transaction account that’s linked to your home loan, the account balance can be offset against the daily balance of your loan. This means the account balance is subtracted from the home loan amount you have to pay interest on.

Yes!

Answer: c) $19.

There are two elements to figuring out your monthly interest: your principal and your interest rate. The principal is the amount you have in your account, and the interest rate is the percentage of your principal that you’ll earn as a bonus from the bank. If you’d like to work out yours, our Savings Calculator can help*.

Sorry that is incorrect!

Answer: c) $19.

There are two elements to figuring out your monthly interest: your principal and your interest rate. The principal is the amount you have in your account, and the interest rate is the percentage of your principal that you’ll earn as a bonus from the bank. If you’d like to work out yours, our Savings Calculator can help*.

Yippee!

Answer: a) A loan where there’s an asset used as collateral for the bank to take if you can’t pay it

Loans are generally secured or unsecured, meaning you have an asset to provide to the bank as collateral or you don’t.  For example, personal loans, especially car loans are often offered as a secured loan.  Where the loan is secured and you default on the debt, the bank can retrieve the asset used as collateral to pay out the loan.  As a plus, banks can sometimes offer lower interest rates on the loan because of the security of the collateral you offer.

Sorry that is incorrect!

Answer: a) A loan where there’s an asset used as collateral for the bank to take if you can’t pay it

Loans are generally secured or unsecured, meaning you have an asset to provide to the bank as collateral or you don’t.  For example, personal loans, especially car loans are often offered as a secured loan.  Where the loan is secured and you default on the debt, the bank can retrieve the asset used as collateral to pay out the loan.  As a plus, banks can sometimes offer lower interest rates on the loan because of the security of the collateral you offer.

Nailed it!

Answer: b) Your total balance, including pending transactions

A ‘current balance’ is the money in your account that includes pending transactions due to come out of your account or that haven’t been cleared yet. Funds that are pending aren’t available for withdrawal. For example, transactions made using payWave can take a few days to clear in your account. It also includes cheques that haven’t been cleared yet, or funds debited to your account that haven’t been processed yet. Your available balance, on the other hand, is the amount in your account that is available for withdrawal.

Sorry that is incorrect!

Answer: b) Your total balance, including pending transactions

A ‘current balance’ is the money in your account that includes pending transactions due to come out of your account or that haven’t been cleared yet. Funds that are pending aren’t available for withdrawal. For example, transactions made using payWave can take a few days to clear in your account. It also includes cheques that haven’t been cleared yet, or funds debited to your account that haven’t been processed yet. Your available balance, on the other hand, is the amount in your account that is available for withdrawal.

Good on ya!

Answer: d) Australian Securities Exchange

If you or someone you know bought or sold stock, most likely they’ve engaged with the Australian Securities Exchange (ASX). This is where companies list their stock for exchange, and sell it off to people, who then become investors of the company. People can then trade stock by buying and selling shares.

Sorry that is incorrect!

Answer: d) Australian Securities Exchange

If you or someone you know bought or sold stock, most likely they’ve engaged with the Australian Securities Exchange (ASX). This is where companies list their stock for exchange, and sell it off to people, who then become investors of the company. People can then trade stock by buying and selling shares.

That’s correct!

Answer: a) By making purchases on your credit card

If you have an eligible credit card, every time you spend you could be earning rewards points. For example, Suncorp Credit Card Rewards is a program that allows customers to earn Points on eligible purchases and redeem them from a range of merchandise, gift cards or vouchers to their credit card card. Or, Points can be transferred to other retail or loyalty programs, like Qantas Frequent Flyers. That means, if you have the financial discipline to use a credit card, you can earn some sweet points using it even for everyday items such as groceries.

Sorry that is incorrect!

Answer: a) By making purchases on your credit card

If you have an eligible credit card, every time you spend you could be earning rewards points. For example, Suncorp Credit Card Rewards is a program that allows customers to earn Points on eligible purchases and redeem them from a range of merchandise, gift cards or vouchers to their credit card card. Or, Points can be transferred to other retail or loyalty programs, like Qantas Frequent Flyers. That means, if you have the financial discipline to use a credit card, you can earn some sweet points using it even for everyday items such as groceries.

Total Score: 0-3

Room for improvement

Don’t be discouraged, everyone has to start somewhere! There’s no time like the present to do your research and boost your financial confidence for the future — whether it’s home loans, savings or general finance know-how. Don’t know where to start? Check out these resources:

Total Score: 4-6

Rising Star

Hats off to you for having a grasp of the basics, but there’s always room for improvement! The more you know, the more confident you can feel in making financial decisions for a better future. 

Total Score: 7-10

Financial Wizard

You’re pretty good with financial know-how — excellent stuff! However, don’t take this a sign to stop learning. The more you know, the more confident you can feel in your financial future.

Read more:


*Calculations in the Savings & Term Deposit Calculator are intended as a guide only. The results may vary slightly from your actual total interest earned due to assumptions and rounding used in calculations.

Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Information Document before making any decisions about whether to acquire a product.

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