SOLUTION MANUAL
ii
Personal Finance, 14th Edition
ii ii ii
By E. Thomas Garman, Chapter 1 - 17
ii ii ii ii ii ii ii
,TABLE OF CONTENTS
Part I: FINANCIAL PLANNING.
1. Understanding Personal Finance.
2. Career Planning.
3. Financial Statements, Goals, And Budgets.
Part II: MONEY MANAGEMENT.
4. Managing Income Taxes.
5. Managing Checking And Savings Accounts.
6. Building And Maintaining Good Credit.
7. Credit Cards And Consumer Loans.
8. Vehicles And Other Major Purchases.
9. Obtaining Affordable Housing.
Part III: INCOME AND ASSET PROTECTION.
10. Managing Property And Liability Risk.
11. Planning For Health Care Expenses.
12. Life Insurance Planning.
Part IV: INVESTMENTS.
13. Investment Fundamentals.
,14. Investing In Stocks And Bonds.
15. Mutual And Exchange-Traded Funds.
16. Real Estate And High-Risk Investments.
17. Retirement And Estate Planning.
Solutionandanswerguide
GARMAN/FOX, PERSONAL FINANCE 14E, CHAPTER 1: THINKING LIKE A FINANCIAL PLANNER
TABLE OF CONTENTS
Answers To Chapter Concept Checks ......................................................................................... 2
What Do You Recommend Now? ............................................................................................... 4
Let’s Talk About It......................................................................................................................... 5
Do The Math .................................................................................................................................. 6
Financial Planning Cases ............................................................................................................... 8
Extended Learning ...................................................................................................................... 10
, ANSWERS TO CHAPTER CONCEPT CHECKS
LO1.1 Recognize The Keys To Achieving Financial Success.
1. Explain The Five Steps In The Financial Planning Process.
ACCULATE ANS: There Are Five Fundamental Steps To The Personal Financial Planning
Process: (1) Evaluate Your Financial Health To Your Education And Career Choice; (2) Define
Your Financial Goals; (3) Develop A Plan Of Action To Achieve Your Goals; (4) Implement
Spending And Saving Plans To Monitor And Control Progress Toward Your Goals; And (5)
Review Your Financial Progress And Make Changes As Appropriate.
2. Distinguish Among Financial Success, Financial Security, And Financial Happiness.
ACCULATE ANS: Financial Success Is The Achievement Of Financial Aspirations That
Are Desired,
Planned, Or Attempted. Success Is Defined By The Individual Or Family That Seeks It. Financial
Success May Be Defined As Being Able To Live According To One’s Standard Of Living.
Financial Security Is That Comfortable Feeling That Your Financial Resources Will Be
Adequate To Fulfill Any Needs You Have As Well As Your Wants. Financial Happiness Is
The Experience You Have When You Are Satisfied With Money Matters. People Who Are
Happy About Their Finances Will See A Spillover Into Positive Feelings About Life In
General.
3. Summarize What You Will Accomplish Studying Personal Finance.
ACCULATE ANS: Several Things Can Be Accomplished By Studying Personal Finance.
Recognize How To Manage Unexpected And Expected Financial Events. Pay As Little As
Possible In Income Taxes. Understand How To Effectively Comparison Shop For Vehicles And
Homes. Protect What We Own. Invest Wisely. Accumulate And Protect The Wealth That We
May Choose To Spend During Our Non-Working Years (E.G., Retirement) Or Donate.
4. What Are The Building Blocks To Achieving Financial Success?
ACCULATE ANS: The Building Blocks For Achieving Financial Success Include A
Foundation Of Regular Income That Provides The Means To Support Your Lifestyle And
Save For Desired Goals In The Future. The Foundation Supports A Base Of Various
Banking Accounts,
Insurance Protection, And Employee Benefits. Then We Can Establish Goals, A
Recordkeeping System, A Budget, And An Emergency Savings Fund. We Will Also Manage
Various Expenses Such As Housing, Transportation, Insurance, And The Payment Of Taxes.
We Will Also Need To Handle Credit, Savings, And Educational Costs. Finally, We Invest In
Various Investment Alternatives Such As Mutual Funds, Stocks, And Bonds, Often For
Retirement. As A Result Of All These Building Blocks, We Are More Apt To Have A
Financially Successful Life.
LO1.2 Understand How The Economy Affects Your Personal Financial Success.
1. Summarize The Phases Of The Business Cycle.
ACCULATE ANS: The Business Cycle Entails A Wavelike Pattern Of Rising And Falling Economic
ii
Personal Finance, 14th Edition
ii ii ii
By E. Thomas Garman, Chapter 1 - 17
ii ii ii ii ii ii ii
,TABLE OF CONTENTS
Part I: FINANCIAL PLANNING.
1. Understanding Personal Finance.
2. Career Planning.
3. Financial Statements, Goals, And Budgets.
Part II: MONEY MANAGEMENT.
4. Managing Income Taxes.
5. Managing Checking And Savings Accounts.
6. Building And Maintaining Good Credit.
7. Credit Cards And Consumer Loans.
8. Vehicles And Other Major Purchases.
9. Obtaining Affordable Housing.
Part III: INCOME AND ASSET PROTECTION.
10. Managing Property And Liability Risk.
11. Planning For Health Care Expenses.
12. Life Insurance Planning.
Part IV: INVESTMENTS.
13. Investment Fundamentals.
,14. Investing In Stocks And Bonds.
15. Mutual And Exchange-Traded Funds.
16. Real Estate And High-Risk Investments.
17. Retirement And Estate Planning.
Solutionandanswerguide
GARMAN/FOX, PERSONAL FINANCE 14E, CHAPTER 1: THINKING LIKE A FINANCIAL PLANNER
TABLE OF CONTENTS
Answers To Chapter Concept Checks ......................................................................................... 2
What Do You Recommend Now? ............................................................................................... 4
Let’s Talk About It......................................................................................................................... 5
Do The Math .................................................................................................................................. 6
Financial Planning Cases ............................................................................................................... 8
Extended Learning ...................................................................................................................... 10
, ANSWERS TO CHAPTER CONCEPT CHECKS
LO1.1 Recognize The Keys To Achieving Financial Success.
1. Explain The Five Steps In The Financial Planning Process.
ACCULATE ANS: There Are Five Fundamental Steps To The Personal Financial Planning
Process: (1) Evaluate Your Financial Health To Your Education And Career Choice; (2) Define
Your Financial Goals; (3) Develop A Plan Of Action To Achieve Your Goals; (4) Implement
Spending And Saving Plans To Monitor And Control Progress Toward Your Goals; And (5)
Review Your Financial Progress And Make Changes As Appropriate.
2. Distinguish Among Financial Success, Financial Security, And Financial Happiness.
ACCULATE ANS: Financial Success Is The Achievement Of Financial Aspirations That
Are Desired,
Planned, Or Attempted. Success Is Defined By The Individual Or Family That Seeks It. Financial
Success May Be Defined As Being Able To Live According To One’s Standard Of Living.
Financial Security Is That Comfortable Feeling That Your Financial Resources Will Be
Adequate To Fulfill Any Needs You Have As Well As Your Wants. Financial Happiness Is
The Experience You Have When You Are Satisfied With Money Matters. People Who Are
Happy About Their Finances Will See A Spillover Into Positive Feelings About Life In
General.
3. Summarize What You Will Accomplish Studying Personal Finance.
ACCULATE ANS: Several Things Can Be Accomplished By Studying Personal Finance.
Recognize How To Manage Unexpected And Expected Financial Events. Pay As Little As
Possible In Income Taxes. Understand How To Effectively Comparison Shop For Vehicles And
Homes. Protect What We Own. Invest Wisely. Accumulate And Protect The Wealth That We
May Choose To Spend During Our Non-Working Years (E.G., Retirement) Or Donate.
4. What Are The Building Blocks To Achieving Financial Success?
ACCULATE ANS: The Building Blocks For Achieving Financial Success Include A
Foundation Of Regular Income That Provides The Means To Support Your Lifestyle And
Save For Desired Goals In The Future. The Foundation Supports A Base Of Various
Banking Accounts,
Insurance Protection, And Employee Benefits. Then We Can Establish Goals, A
Recordkeeping System, A Budget, And An Emergency Savings Fund. We Will Also Manage
Various Expenses Such As Housing, Transportation, Insurance, And The Payment Of Taxes.
We Will Also Need To Handle Credit, Savings, And Educational Costs. Finally, We Invest In
Various Investment Alternatives Such As Mutual Funds, Stocks, And Bonds, Often For
Retirement. As A Result Of All These Building Blocks, We Are More Apt To Have A
Financially Successful Life.
LO1.2 Understand How The Economy Affects Your Personal Financial Success.
1. Summarize The Phases Of The Business Cycle.
ACCULATE ANS: The Business Cycle Entails A Wavelike Pattern Of Rising And Falling Economic
