Methodology Behind the Finance IQ Test (FIQ)

The Finance IQ Test (or FIQ for short) has been designed with a clear purpose: to measure understanding of the most critical personal finance topics that individuals face in everyday life. Personal financial literacy is a pathway to prosperity, and this test helps evaluate one's grasp of the fundamentals.

Question Selection Process

The choice of 50 questions was deliberate. A larger test could overwhelm participants and deter engagement. By limiting the scope to 50, we maintained focus on usability while ensuring comprehensive coverage of critical topics. This format makes the test:

• Time-Efficient: At 30 minutes, FIQ respects participants' time
• Accessible: Concise enough for a wide audience to complete without frustration

The test aims to strike a balance between depth and usability. Including too many questions would discourage participation, while too few would risk missing key topics. Our team carefully curated the test questions to ensure the following:

1. Coverage of 12 Essential Topics:
   Earning Money

   Spending

   Retirement

   Entrepreneurship

   Debt & Credit

   Risk

   Education

   Big Buys

   Financial Goals

   Saving

   Investing

   General Knowledge
2. Practical Focus: The test emphasizes concepts that users are likely to encounter in daily life. For example, understanding a paycheck, managing credit card debt, or preparing for emergencies.
3. Engagement: Questions are designed to be relatable and thought-provoking, encouraging users to reflect on their financial decisions.
4. Breadth over Depth: While depth is valuable, the test focuses on broad exposure to foundational topics rather than deep dives into specific areas. Advanced concepts are reserved for future versions like FIQ-2.

Technical Methodology and Standards

The methodology behind the FIQ is grounded in practical experience and proven concepts. Our team was also behind the research and publication of The Financial Empowerment Handbook. During the writing phase, more than 100 interviews were conducted to hone in on the most important topics for teaching financial literacy. Since its publication, the book has received widespread positive feedback, confirming its balanced and comprehensive approach to financial education.

As such, our material—both the content and the test questions—has been validated by hundreds of readers and concerned community members. The book served as our proof of concept, demonstrating that our approach to financial literacy resonates with a wide audience. The test is a natural extension, designed to measure one's understanding of what we have confirmed to be the most critical elements of financial literacy.

To ensure validity and reliability, the FIQ aligns with high school and college level curriculum and serves as a representative assessment of understanding according to both state and national requirements:

1. Blueprint Alignment: The questions are mapped to key competencies identified by national financial literacy standards outlined by the Jumpstart Coalition for Personal Financial Literacy and state standards including Personal Financial Literacy & Economics (PFLE) in Texas
2. Question Diversity: Multiple-choice and scenario-based questions are used to assess not only factual knowledge but also practical application and critical thinking skills.
3. Time Constraints: A 30-minute limit ensures that participants focus on key financial concepts without unnecessary pressure, maintaining a balance between thoroughness and efficiency.

Encouraging Financial Literacy

Some high school and college students have an opportunity to take personal financial literacy classes—arguably among the most valuable courses they can enroll in. We wholeheartedly recommend taking such classes if available. For those without formal options, self-study is a viable path. We recommend The Financial Empowerment Handbook: The Comprehensive Guide to Financial Literacy and Personal Prosperity, a book we published in 2023 which offers excellent coverage of required topics.

The goal of the FIQ is to highlight areas for improvement, not to discourage participants. Financial illiteracy is a widespread issue, particularly in the U.S., where many face challenges such as debt, low income, and lack of retirement savings. This test was created because most people DON’T know this stuff! It’s okay to start at a lower level, we all do, the important thing is to begin.