Money stress? Check your financial literacy with these 3 questions.

About 41 p.c of U.S. adults reported feeling each anxiousness and stress when interested by or discussing their private funds, in accordance with knowledge from the 2018 Finra Nationwide Monetary Functionality Examine. The excellent news is that enhancing your monetary literacy may also help you face your cash issues, reduce down debt and method the long run with much less anxiousness.

Three questions have change into a benchmark for measuring monetary literacy. They don’t require advanced calculations however will assist you gauge your understanding of compound curiosity, inflation and threat diversification. Listed below are the questions.

1. Suppose you had $100 in a financial savings account, and the rate of interest was 2 p.c per 12 months. After 5 years, how a lot do you suppose you’ll have within the account in the event you left the cash to develop?

2. Think about that the rate of interest in your financial savings account was 1 p.c per 12 months, and inflation was 2 p.c per 12 months. After 1 12 months, how a lot would you be capable of purchase with the cash on this account?

3. True or false. Shopping for a single firm’s inventory normally offers a safer return than a inventory mutual fund.

Researchers discovered that those that may appropriately reply these three questions have been considerably much less prone to really feel financially anxious or confused. (The right solutions are: a, c and false.)

In case you discovered the questions easy and you continue to have cash stress, it’s by no means too late to maintain constructing your monetary literacy. I’ve compiled a listing of tales from our standard personal-finance author Michelle Singletary, whose work can information you thru submitting taxes earlier than the April 18 deadline, assist you assess your monetary well being and begin planning to get on a greater monetary path.

5 last-minute tax suggestions earlier than the April 18 deadline

10 issues to know earlier than submitting taxes in 2023

And now that you simply’ve acquired your taxes beneath management, right here’s extra nice recommendation from Michelle. I extremely advocate her “cash milestones” for each age — you’ll wish to get the entire household concerned!

The place do you stand financially? Get a rating on this quiz — and our recommendation.

Michelle Singletary’s cash milestones for each age.

You’ll be able to join Michelle’s e-newsletter Private Finance right here,

Please tell us how we’re doing. E mail me at wellbeing@washpost.com.