SOLUTION MANUAL Personal Financial Planning, 16th Edition by Randy Billingsley, Lawrence J. Gitman All Chapters 1 to 15 complete Verified editon

SOLUTION MANUAL
Personal Financial ,16th Edition
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by Billingsley, Gitman, Chapters 1 - 15, Complete
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Table of Contents
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,Part I: FOUNDATIONS OF FINANCIAL PLANNING.
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1. Understanding the Financial Planning Process.
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2. Developing Your Financial Statements and Plans.
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3. Preparing Your Taxes.
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Part II: MANAGING BASIC ASSETS.
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4. Managing Your Cash and Savings.
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5. Making Automobile and Housing Decisions.
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Part III: MANAGING CREDIT.
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6. Using Credit.
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7. Using Consumer Loans.
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Part IV: MANAGING INSURANCE NEEDS.
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8. Insuring Your Life.
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9. Insuring Your Health.
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10. Protecting Your Property.
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Part V: MANAGING INVESTMENTS.
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11. Investment Planning.
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12. Investing in Stocks and Bonds.
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13. Investing in Mutual Funds and Real Estate.
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Part VI: RETIREMENT AND ESTATE PLANNING.
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14. Planning for Retirement.
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15. Preserving Your Estate.
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,Chapter 1 g




Understanding the Financial Planning Process
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How gWill gThis gAffect gMe?
The gheart gof gfinancial gplanning gis gmaking gsure gyour gvalues gline gup gwith ghow gyou gspend gand
gsave.gThat gmeans gknowing gwhere gyou gare gfinancially gand gplanning gon ghow gto gget gwhere gyou
gwant gto gbegin gthe gfuture gno gmatter gwhat glife gthrows gat gyou. gFor gexample, ghow gshould gyour gplan
ghandle gthe gprojection gthat gSocial gSecurity gcosts gmay gexceed grevenues gby g2035? gAnd gwhat gif

gthe ggovernmentg decides gto graise gtax grates gto ghelp gcover gthe gfederal gdeficit? gAn ginformed
gfinancial gplan gshould greflect g such guncertainties gand g more.




This gchapter goverviews gthe gfinancial gplanning gprocess gand gexplains gits gcontext. gTopics ginclude
ghow gfinancial gplans gchange gto gaccommodate gyour gcurrent gstage gin glife gand gthe grole gthat

gfinancialgplanners gcan gplay gin ghelping gyou gachieve gyour gobjectives. gAfter greading gthis gchapter
gyou gwill ghave ga ggood gperspective gon ghow gto gorganize g your goverall gpersonal gfinancial gplan.




LEARNING GOALS g




LG1 gIdentify gthe gbenefits gof gusing gpersonal gfinancial gplanning gtechniques gto gmanage
gyourgfinances.

Key gconcept gin gthis gsection gis gthe gplanning gmodel gas gdisplayed gin gExhibit g1.1. gYour gstandard gof
gliving gis ggreatly gimpacted gby gyour gspending ghabits gand gyour gcommitment gto gsaving. gYour

gspending gis gmeasured gby gyour gpropensity gto gconsume. gWealth gis gthe gtotal gvalue gof gall

gpropertyg you gown gless gthe gamount gthat gyou gowe gto gothers.

ACTIVITY: g Ask gthe gstudents gto gassume gthat gthey ghave gjust ginherited g$100,000. gWhat gwill
gyoug
do gwith gthe gmoney? gWrite gdown gthree gways gyou gwill gspend gor guse gthe gmoney.

, Ask gthe gstudents gto gshare gone gitem gwith gthe gclass gand grecord gwhat gthey gsay gso gthat gthe gentire
gclass g
can greflect gon gthe ganswers. gHopefully, gat gleast ga gfew gwill gmention ginvesting geven gif gonly
g$10,000g of gthe gamount. g Use gtheir ganswers gto gdiscuss gtaking gcare gof gcurrent gneeds gversus gfuture
gneeds.

Focus gon gtheir gpropensity gto gconsume gand gits gimpact gon gaccumulating gwealth. gPoint gout
gthegFinancial gPlanning gTip, g―Be gSMART gin gPlanning gYour gFinancial gGoals.‖
Use gExhibit g1.2 gto gshow ghow gthe gaverage gperson gearns gand gspends gtheir gmoney gand gExhibit g1.6
gtog
help gthe gstudent gidentify gwhere gthey gare gnow.

LG2 gDescribe gthe gpersonal gfinancial gplanning gprocess gand gdefine gyour ggoals.

Dwight gEisenhower, garmy ggeneral gand gpresident, g is gquoted gas gsaying g ―Plans gare guseless;
gPlanning gis gpriceless‖. gThe gprocess gof gplanning gallows gyou gto gfocus gon gthe gissues gthat gare gmost

gimportant gand gto gbe gready gwhen gthings gchange.




Exhibit g1.3 glists gthe gSix gStep gFinancial gPlanning gProcess. gThe gfirst gand gmost gimportant gis
gdefining gyour gfinancial ggoals. gExhibit g1.6 glists ggoals gby gage gto gdemonstrate ghow ggoals gchange

gover gtime. gUse gthe gexamples gin gExhibit g 1.5 gto gask gstudents gif gthe gassumptions gare grealistic.

gYes,gthe ganswer gis gin gthe gexhibit, gbut gmany gwill gnot ghave gread gchapter gat gthis gpoint. gFor gyour
guse, gthe gassumptions gare:




Assumption g1: gSaving ga gfew gthousand gdollars ga gyear gshould gprovide genough gto gfund gmy
gchild‘sg
college gEducation.
Assumption g2: gAn gemergency gfund glasting g3 gmonths gshould gbe gadequate.
Assumption g3: gI gwill gbe gable gto gretire gat g65 gand gshould ghave gplenty gto glive gon gin
gretirement. gAssumption g4: gI‘m grelying gon gthe grule gof gthumb gthat gI gwill gneed gonly g70
gpercent gof gmy gpre-g
retirement gincome gto gmanage gnicely gin gretirement.

There gare gseveral gworksheets gin gthe gbook. gWorksheet g1.1 ggives gthe gstudent ga gformat gto gwrite
gdown gtheir gPersonal gFinancial gGoals. gThere gis gpower gin gwriting gdown ggoals g[and g most g any

gotherg
plan]. gRecording gthe ggoal gand gthen greviewing gthree gmonths glater gwill ghelp gyou gto gkeep
gfocus gon gthe ggoal.




LG3 gExplain gthe glife gcycle gof gfinancial gplans, gtheir grole gin gachieving gyour gfinancial ggoals,
ghow gto gdeal gwith gspecial gplanning gconcerns, gand gthe guse gof g professional gfinancial

gplanners.




Exhibit g1.7 gcan ghelp gfocus gthe gattention gon ghow ggoals gdiffer gbetween gthe gvarious gstages gof glife.
gSection g1-3b glists gvarious gdecisions gthat gyou gwill ghave gto gmake gover gyour glife. gThe gsection g1-3c

gaddresses gSpecial gPlanning gConcerns. gWorksheet g1.2 gfocuses gon gthe gfinancial gbenefit gto gthe

gfamily gof gthe gsecond gincome. gIf gthe gsecond gincome gis gfrom ga gminimum gwage gjob, git gmay gnot gbe

gag
good gfinancial gdecision. gOf gcourse ghaving ga gjob, geven ga gminimum gwage gjob, gmay ggive gthe
gpersongpsychic gincome gthat gwill goverride gthe gfinancial gimpact.

While gperhaps goff gtopic, gI grecall ga ghigh gschool gscience gteacher gwho gwas ga gsmoker. gHe gwalked
gthrough gthe gamount gof gmoney ghe gspent gon gpurchasing gtobacco gproducts. g That gcomputation ghad

ga