Mid-Term Quiz Study Guide
Mid-term Quiz Study Guide
Chapter One
1.1 List the 5 steps in the personal financial planning process: 1. Analyze your current finances 2. Develop goals 3. Identify and evaluate strategies to achieve your goals 4. Establish and implement your plan 5. Reevaluate and revise your plan as needed 1.1 Self Check
Define personal finance and personal financial planning: * Personal Finance- a specialized area of study that focuses on individual and household financial decisions, such as budgeting, saving, spending, insurance, and investments. * Personal Financial Planning- the process of developing and implementing an integrated, comprehensive plan designed to meet financial goals, to improve financial well-being, and to prepare for financial emergencies.
1.2 Summarize what influences personal financial planning: 1. Life cycle 2. Family composition 3. Values 4. Attitudes 5. Interest rates 6. Inflations Rates
1.3 Identify the parts of a financial plan: 1. Establishing a firm foundation: Establish the necessary foundations, including an understanding of the personal financial planning process, the necessary tools, and the tax effects of your financial decisions. 2. Secure your basic needs: This step includes meeting your consumption and housing needs, setting aside funds for financial emergencies, protecting your assets with insurance, establishing a career path, and making educated employee benefits decisions. 3. Building wealth: After you have secured your basic needs, you can begin to think about wealth building to meet future needs, such as retirement and college funding. With financial security comes the need to protect your wealth. 4. Protecting wealth and dependents: The final stage in the process of developing a comprehensive financial plan includes the protective elements of life insurance, long term care insurance, and estate planning.
1.3 Self Check
What are the basic
Chapter One
1.1 List the 5 steps in the personal financial planning process: 1. Analyze your current finances 2. Develop goals 3. Identify and evaluate strategies to achieve your goals 4. Establish and implement your plan 5. Reevaluate and revise your plan as needed 1.1 Self Check
Define personal finance and personal financial planning: * Personal Finance- a specialized area of study that focuses on individual and household financial decisions, such as budgeting, saving, spending, insurance, and investments. * Personal Financial Planning- the process of developing and implementing an integrated, comprehensive plan designed to meet financial goals, to improve financial well-being, and to prepare for financial emergencies.
1.2 Summarize what influences personal financial planning: 1. Life cycle 2. Family composition 3. Values 4. Attitudes 5. Interest rates 6. Inflations Rates
1.3 Identify the parts of a financial plan: 1. Establishing a firm foundation: Establish the necessary foundations, including an understanding of the personal financial planning process, the necessary tools, and the tax effects of your financial decisions. 2. Secure your basic needs: This step includes meeting your consumption and housing needs, setting aside funds for financial emergencies, protecting your assets with insurance, establishing a career path, and making educated employee benefits decisions. 3. Building wealth: After you have secured your basic needs, you can begin to think about wealth building to meet future needs, such as retirement and college funding. With financial security comes the need to protect your wealth. 4. Protecting wealth and dependents: The final stage in the process of developing a comprehensive financial plan includes the protective elements of life insurance, long term care insurance, and estate planning.
1.3 Self Check
What are the basic