What do you know about personal finance?

Personal finance goes beyond basic budgeting. Today, personal finance gurus tackle the topics of home ownership, FICO scores, retirement savings and much more. Can you separate personal finance fact from fiction? Take the quiz and find out!

Question 1 of 15

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True or false: It's always better to buy your home than to rent.

Home ownership isn’t for everyone. You should consider several scenarios before you choose to buy a home, including how long you plan to live in the home and whether or not you can afford basic home maintenance and repairs.

Question 2 of 15

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How many FICO credit scores do consumers have?

Consumers have more than 50 credit scores, including scores available to mortgage companies, automotive lenders, credit card companies and more, according to BankRate.

Question 3 of 15

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True or false: The more money you earn, the more money you save.

Lifestyle creep often comes into play when employees get a boosts in salary — items once considered out of reach financially are suddenly affordable. New purchases can quickly eat away at the increased earnings. 

Question 4 of 15

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How much more do college graduates with a bachelor’s degree make over the course of their careers, compared to employees with only a high school diploma?

The recent recession has some college graduates questioning the time and expense needed to obtain their degrees, but over a lifetime, a graduate with a bachelor’s degree makes about $964,000 more than peers with only a high school education.

Question 5 of 15

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Is debt is always a bad thing?

All debt isn’t bad. Not everyone has $200,000 saved up to buy a home, and even conservative personal finance guru Dave Ramsey gives the go-ahead for his listeners to take out a mortgage.

Question 6 of 15

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Can your credit score impact your insurance rates?

A low credit score can lead to higher rates for automotive insurance, homeowner’s insurance and even renter’s insurance.

Question 7 of 15

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As of the most recent increase in 2009, what is the federal minimum wage?

The Fair Labor Standards Act stipulates that there must be a federal minimum wage. States have their own minimum wages. The U.S. Department of Labor's website says that "where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages." 

Question 8 of 15

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Can prospective employers use your credit score during the hiring process?

Prospective employers don’t have access to an applicant's credit score, although some companies will evaluate an applicant's credit report during the hiring process.

Question 9 of 15

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When should you start saving for retirement?

Most financial advisors will recommend that you start saving for retirement as soon as possible. (Compound interest is a beautiful thing!)

Question 10 of 15

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True or false: Two incomes are better than one.

Two salaries may mean a higher gross household income, but it doesn’t mean that a two-income household is always the better choice, especially for families. Extra expenses like daycare and dual commutes should be evaluated.

Question 11 of 15

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Which of the following is not a factor in the FICO method of evaluating a person's credit score?

From the moment you borrow money, several factors are tracked that play into your overall credit score. However, the MyFICO website lists several factors that are not taken into account, including race, age, employment information and where you live. 

Question 12 of 15

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At which income level should you start saving?

Everyone makes enough to start saving money — even if it's only $5 per week.

Question 13 of 15

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The average American's credit score hovers just below 700. That number is considered:

While a credit score of 300 is the lowest on the scale, an "excellent" score would be anywhere between 750 and 850. According to Credit Karma, a credit score is considered "good" at 720 or higher. 

Question 14 of 15

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401(K) 2012/Flickr
Is the mortgage interest tax deduction a good reason to avoid pre-paying your mortgage?

This comes down to basic math. What’s better: paying $10,000 in interest to save $2,500 on your taxes (depending on your tax bracket) or just paying $2,500 in taxes? If you have the chance to pay off your mortgage early, do it.

Question 15 of 15

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Photo: 401(k) 2012/Flickr
As a rule of thumb, how much should you save for retirement when it's all said and done?

Fidelity Investments recommends saving at least 8 times your maximum salary "to increase the odds that you won't outlive your savings during 25 years in retirement." The financial services company says that you can work your way up by starting to save 1x your salary by the time you're 35 and increasing to 3x and 5x with every 10 years that follow. CNN Money offers a great tool to determine whether you're on the right track.

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