Solution Manual
Personal Financial Planning
By Randy Billingsley, Lawrence J. Gitman
16th Edition
,Table Of Content
1. Understanding The Financial Planning Process.
2. Developing Your Financial Statements And Plans.
3. Preparing Your Taxes.
4. Managing Your Cash And Savings.
5. Making Automobile And Housing Decisions.
6. Using Credit.
7. Using Consumer Loans.
8. Insuring Your Life.
9. Insuring Your Health.
10. Protecting Your Property.
11. Investment Planning.
12. Investing In Stocks And Bonds.
13. Investing In Mutual Funds And Real Estate.
14. Planning For Retirement.
15. Preserving Your Estate.
,Solution Manual For
Personal Financial Planning 16th Edition By Randy
Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Understanding The
Financial Planning Process
Chapter 1
How Will This Affect Me?
The Heart Of Financial Planning Is Making Sure Your Values Line Up With How You Spend
And Save.That Means Knowing Where You Are Financially And Planning On How To Get
Where You Want To BeIn The Future No Matter What Life Throws At You. For Example, How
Should Your Plan Handle The Projection That Social Security Costs May Exceed Revenues By
2035? And What If The GovernmentDecides To Raise Tax Rates To Help Cover The Federal
Deficit? An Informed Financial Plan Should Reflect Such Uncertainties And More.
This Chapter Overviews The Financial Planning Process And Explains Its Context. Topics
Include How Financial Plans Change To Accommodate Your Current Stage In Life And The
Role That FinancialPlanners Can Play In Helping You Achieve Your Objectives. After
Reading This Chapter You Will Have A Good Perspective On How To Organize Your Overall
Personal Financial Plan.
Learning Goals
Lg1 Identify The Benefits Of Using Personal Financial Planning Techniques To Manage
YourFinances.
, Key Concept In This Section Is The Planning Model As Displayed In Exhibit 1.1. Your Standard
Of Living Is Greatly Impacted By Your Spending Habits And Your Commitment To Saving. Your
Spending Is Measured By Your Propensity To Consume. Wealth Is The Total Value Of All
PropertyYou Own Less The Amount That You Owe To Others.
Activity: Ask The Students To Assume That They Have Just Inherited $100,000. What Will
YouDo With The Money? Write Down Three Ways You Will Spend Or Use The Money.
Ask The Students To Share One Item With The Class And Record What They Say So That The
Entire Class Can Reflect On The Answers. Hopefully, At Least A Few Will Mention Investing
Even If Only $10,000 Of The Amount. Use Their Answers To Discuss Taking Care Of Current
Needs Versus Future Needs.
Focus On Their Propensity To Consume And Its Impact On Accumulating Wealth. Point Out
TheFinancial Planning Tip, ―Be Smart In Planning Your Financial Goals.‖
Use Exhibit 1.2 To Show How The Average Person Earns And Spends Their Money And
Exhibit 1.6 ToHelp The Student Identify Where They Are Now.
Lg2 Describe The Personal Financial Planning Process And Define Your Goals.
Dwight Eisenhower, Army General And President, Is Quoted As Saying ―Plans Are Useless;
Planning Is Priceless‖. The Process Of Planning Allows You To Focus On The Issues That Are
Most Important And To Be Ready When Things Change.
Exhibit 1.3 Lists The Six Step Financial Planning Process. The First And Most Important Is
Defining Your Financial Goals. Exhibit 1.6 Lists Goals By Age To Demonstrate How Goals
Change Over Time. Use The Examples In Exhibit 1.5 To Ask Students If The Assumptions Are
Realistic. Yes,The Answer Is In The Exhibit, But Many Will Not Have Read Chapter At This
Point. For Your Use, The Assumptions Are:
Assumption 1: Saving A Few Thousand Dollars A Year Should Provide Enough To Fund My
Child‘SCollege Education.
Assumption 2: An Emergency Fund Lasting 3 Months Should Be Adequate.
Assumption 3: I Will Be Able To Retire At 65 And Should Have Plenty To Live On In
Retirement. Assumption 4: I‘M Relying On The Rule Of Thumb That I Will Need Only 70
Percent Of My Pre-Retirement Income To Manage Nicely In Retirement.
There Are Several Worksheets In The Book. Worksheet 1.1 Gives The Student A Format To
Write Down Their Personal Financial Goals. There Is Power In Writing Down Goals [And
Most Any OtherPlan]. Recording The Goal And Then Reviewing Three Months Later Will
Help You To Keep Focus On The Goal.
Lg3 Explain The Life Cycle Of Financial Plans, Their Role In Achieving Your Financial
Goals, How To Deal With Special Planning Concerns, And The Use Of Professional
Financial Planners.
Exhibit 1.7 Can Help Focus The Attention On How Goals Differ Between The Various Stages
Personal Financial Planning
By Randy Billingsley, Lawrence J. Gitman
16th Edition
,Table Of Content
1. Understanding The Financial Planning Process.
2. Developing Your Financial Statements And Plans.
3. Preparing Your Taxes.
4. Managing Your Cash And Savings.
5. Making Automobile And Housing Decisions.
6. Using Credit.
7. Using Consumer Loans.
8. Insuring Your Life.
9. Insuring Your Health.
10. Protecting Your Property.
11. Investment Planning.
12. Investing In Stocks And Bonds.
13. Investing In Mutual Funds And Real Estate.
14. Planning For Retirement.
15. Preserving Your Estate.
,Solution Manual For
Personal Financial Planning 16th Edition By Randy
Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Understanding The
Financial Planning Process
Chapter 1
How Will This Affect Me?
The Heart Of Financial Planning Is Making Sure Your Values Line Up With How You Spend
And Save.That Means Knowing Where You Are Financially And Planning On How To Get
Where You Want To BeIn The Future No Matter What Life Throws At You. For Example, How
Should Your Plan Handle The Projection That Social Security Costs May Exceed Revenues By
2035? And What If The GovernmentDecides To Raise Tax Rates To Help Cover The Federal
Deficit? An Informed Financial Plan Should Reflect Such Uncertainties And More.
This Chapter Overviews The Financial Planning Process And Explains Its Context. Topics
Include How Financial Plans Change To Accommodate Your Current Stage In Life And The
Role That FinancialPlanners Can Play In Helping You Achieve Your Objectives. After
Reading This Chapter You Will Have A Good Perspective On How To Organize Your Overall
Personal Financial Plan.
Learning Goals
Lg1 Identify The Benefits Of Using Personal Financial Planning Techniques To Manage
YourFinances.
, Key Concept In This Section Is The Planning Model As Displayed In Exhibit 1.1. Your Standard
Of Living Is Greatly Impacted By Your Spending Habits And Your Commitment To Saving. Your
Spending Is Measured By Your Propensity To Consume. Wealth Is The Total Value Of All
PropertyYou Own Less The Amount That You Owe To Others.
Activity: Ask The Students To Assume That They Have Just Inherited $100,000. What Will
YouDo With The Money? Write Down Three Ways You Will Spend Or Use The Money.
Ask The Students To Share One Item With The Class And Record What They Say So That The
Entire Class Can Reflect On The Answers. Hopefully, At Least A Few Will Mention Investing
Even If Only $10,000 Of The Amount. Use Their Answers To Discuss Taking Care Of Current
Needs Versus Future Needs.
Focus On Their Propensity To Consume And Its Impact On Accumulating Wealth. Point Out
TheFinancial Planning Tip, ―Be Smart In Planning Your Financial Goals.‖
Use Exhibit 1.2 To Show How The Average Person Earns And Spends Their Money And
Exhibit 1.6 ToHelp The Student Identify Where They Are Now.
Lg2 Describe The Personal Financial Planning Process And Define Your Goals.
Dwight Eisenhower, Army General And President, Is Quoted As Saying ―Plans Are Useless;
Planning Is Priceless‖. The Process Of Planning Allows You To Focus On The Issues That Are
Most Important And To Be Ready When Things Change.
Exhibit 1.3 Lists The Six Step Financial Planning Process. The First And Most Important Is
Defining Your Financial Goals. Exhibit 1.6 Lists Goals By Age To Demonstrate How Goals
Change Over Time. Use The Examples In Exhibit 1.5 To Ask Students If The Assumptions Are
Realistic. Yes,The Answer Is In The Exhibit, But Many Will Not Have Read Chapter At This
Point. For Your Use, The Assumptions Are:
Assumption 1: Saving A Few Thousand Dollars A Year Should Provide Enough To Fund My
Child‘SCollege Education.
Assumption 2: An Emergency Fund Lasting 3 Months Should Be Adequate.
Assumption 3: I Will Be Able To Retire At 65 And Should Have Plenty To Live On In
Retirement. Assumption 4: I‘M Relying On The Rule Of Thumb That I Will Need Only 70
Percent Of My Pre-Retirement Income To Manage Nicely In Retirement.
There Are Several Worksheets In The Book. Worksheet 1.1 Gives The Student A Format To
Write Down Their Personal Financial Goals. There Is Power In Writing Down Goals [And
Most Any OtherPlan]. Recording The Goal And Then Reviewing Three Months Later Will
Help You To Keep Focus On The Goal.
Lg3 Explain The Life Cycle Of Financial Plans, Their Role In Achieving Your Financial
Goals, How To Deal With Special Planning Concerns, And The Use Of Professional
Financial Planners.
Exhibit 1.7 Can Help Focus The Attention On How Goals Differ Between The Various Stages
