SOLUTION MANUAL Personal Finance, 14th Edition By E. Thomas Garman, Chapter 1 - 17

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SOLUTIONMANUAL b
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Personal Finance, 14th Edition By
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E. Thomas Garman, Chapter 1 - 17
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TABLE OF CONTENTS bh bh b h




Part I: FINANCIAL PLANNING.
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1. Understanding Personal Finance. b h b h




2. Career Planning. b h




3. Financial Statements, Goals, and Budgets.
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bh Part II: MONEY MANAGEMENT.
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4. Managing Income Taxes. b h b h




5. Managing Checking and Savings Accounts. b h b h b h b h




6. Building and Maintaining Good Credit.
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7. Credit Cards and Consumer Loans.
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8. Vehicles and Other Majory Purchases.
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9. Obtaining Affordable Housing. b h b h




Part III: INCOME AND ASSET PROTECTION.
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10. Managing Property and Liability Risk. b h b h b h b h




11. Planning for Health Care Expenses. b h b h b h b h




12. Life Insurance Planning.
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bh Part IV: INVESTMENTS.
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13. Investment Fundamentals. bh




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14. Investing in Stocks and Bonds. b h b h b h b h




15. Mutual and Exchange-Traded Funds. b h b h b h




16. Real Estate and High-Risk Investments.
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17. Retirement and Estate Planning. b h b h b h




SolutionandAnswerGuide h
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GARMAN/FOX, b h PERSONAL b h b h FINANCE b h b h 14E, b h CHAPTER b h b h 1: b h THINKING b h b h LIKE b h b h AY b h FINANCIAL b h




PLANNER
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TABLE OF CONTENTS
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Answers b h to b h Chapter b h Concept b h Checks.................................................................................2
What b h Do b h You b h Recommend b h Now?......................................................................................4
Let’s b h Talk b h About b h It..................................................................................................................5
Do b h the b h Math .............................................................................................................................6
Financial Planning b h b h Cases ...........................................................................................................8
Extended Learning .................................................................................................................... 10
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ANSWERS TO CHAPTER CONCEPT CHECKS B H B H B H B H




LO1.1 b h Recognize the b h b h keys b h to b h achieving financial b h b h success.
1. Explain b h the b h five b h steps b h in b h the b h financial b h planning b h process.

Answer: There are five fundamental steps to the personal financial planning
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b process:
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(1) evaluate your financial health to your education and career choice; (2)
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b define your financial goals; (3) develop a plan of action to achieve your
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b goals; (4) implement spending and saving plans to monitor and control
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b progress toward your goals; and (5) review your financial progress and make
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b changes as appropriate.
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2. Distinguish b h among b h financial b h success, b h financial b h security, b h and b h financial b h happiness.

Answer: Financial success is the achievement of financial aspirations that are
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b desired, planned, or attempted. Success is defined by the individual or
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b family that seeks it.
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Financial success may be defined as being able to live according to
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b one’s standard ofy living. Financial security is that comfortable feeling that
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b your financial resources will be adequate to fulfill any needs you have
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b as well as your wants. Financial
h b h happiness is the experience you b h b h b h b h b h b h bh b h b h




b have when you are satisfied with money matters. People who are
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happy about their finances will see a spillover into positive feelings
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b about life in general.
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3. Summarize b h what b h you b h will b h accomplish b h studying b h personal b h finance.

Answer: Several things can be accomplished by studying personal finance.
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bRecognize how to manage unexpected and expected financial events. Pay
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b as little as possible in income taxes. Understand how to effectively
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bcomparison shop for vehicles and homes. Protect what we own. Invest
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bwisely. Accumulate and protect the wealth that we may choose to spend during
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bour non-working years (e.g., retirement) or donate.
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4. What b h are b h the b h building b h blocks b h to b h achieving b h financial b h success?

Answer: The building blocks for achieving financial success include a
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bfoundation ofy regular income that provides the means to support your
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b lifestyle and save for desired goals in the future. The foundation supports
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ba base of various banking accounts, insurance protection, and employee
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bbenefits. Then we can establish goals, a recordkeeping system, a budget,
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band an emergency savings fund. We will also manage various expenses such
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bas housing, transportation, insurance, and the payment of taxes. We will also
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bneed to handle credit, savings, and educational costs. Finally, we invest
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b in various investment alternatives such as mutual funds, stocks, and bonds,
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boften for retirement. As a result of all these building blocks, we
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b are more apt to have a financially successful life.
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LO1.2 Understand how
b h b h b h the b h economy b h affects your b h b h personal financial b h b h success.
1. Summarize b h the b h phases b h of b h the b h business b h cycle.
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