Garman/Fox's Personal Finance, 14th Edition Solution and Answer Guide, 2025/2026 Complete Chapters 1 - 17, Verified Latest Version

SOLUTION MANUAL

Personal Finance, 14th Edition

By E. Thomas Garman, Chapter 1 - 17

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Part I: FINANCIAL PLANNING.
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1. Understanding Personal Finance.
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2. Career Planning.
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3. Financial Statements, Goals, and Budgets.
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Part II: MONEY MANAGEMENT.
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4. Managing Income Taxes.
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5. Managing Checking and Savings Accounts.
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6. Building and Maintaining Good Credit.
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7. Credit Cards and Consumer Loans.
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8. Vehicles and Other Major Purchases.
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9. Obtaining Affordable Housing.
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Part III: INCOME AND ASSET PROTECTION.
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10. Managing Property and Liability Risk.
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11. Planning for Health Care Expenses.
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12. Life Insurance Planning.
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Part IV: INVESTMENTS.
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13. Investment Fundamentals.
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14. Investing in Stocks and Bonds.
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,15. Mutual and Exchange-Traded Funds.
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16. Real Estate and High-Risk Investments.
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17. Retirement and Estate Planning.
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Solutionand Answer Guide w
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GARMAN/FOX, PERSONAL FINANCE 14E, CHAPTER 1: THINKING LIKE A FINANCIAL PLANNER
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TABLE OF CONTENTS SW SW




Answers to Chapter Concept Checks ............................................................................................ 2
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What Do You Recommend Now?.................................................................................................. 4
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Let’s Talk About It ......................................................................................................................................................... 5
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Do the Math.................................................................................................................................... 6
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Financial Planning Cases................................................................................................................ 8
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Extended Learning ....................................................................................................................... 10
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, ANSWERS TO CHAPTER CONCEPT CHECKS SW SW SW SW




LO1.1 Recognize the keys to achieving financial success.
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1. Explain the five steps in the financial planning process.
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Answer: There are five fundamental steps to the personal financial planning process: (1) evaluate y
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our financial health to your education and career choice; (2) define your financial goals; (3) develop
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a plan of action to achieve your goals; (4) implement spending and saving plans to monitor and co
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ntrol progress toward your goals; and (5) review your financial progress and make changes as appr
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opriate.

2. Distinguish among financial success, financial security, and financial happiness. sw sw sw sw sw sw sw sw




Answer: Financial success is the achievement of financial aspirations that are desired, planned, or
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attempted. Success is defined by the individual or family that seeks it. Financial success may be defin
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ed as being able to live according to one’s standard of living. Financial security is that comfortable
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feeling that your financial resources will be adequate to fulfill any needs you have as well as your w
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ants. Financial happiness is the experience you have when you are satisfied with money matters. P
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eople who are happy about their finances will see a spillover into positive feelings about life in gen
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eral.

3. Summarize what you will accomplish studying personal finance. sw sw sw sw sw sw sw




Answer: Several things can be accomplished by studying personal finance. Recognize how to manag
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e unexpected and expected financial events. Pay as little as possible in income taxes. Understand how
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to effectively comparison shop for vehicles and homes. Protect what we own. Invest wisely. Accumulat
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e and protect the wealth that we may choose to spend during our non-
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working years (e.g., retirement) or donate. sw sw sw sw sw




4. What are the building blocks to achieving financial success?
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Answer: The building blocks for achieving financial success include a foundation of regular incom
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e that provides the means to support your lifestyle and save for desired goals in the future. The fou
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ndation supports a base of various banking accounts, insurance protection, and employee benefits
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. Then we can establish goals, a recordkeeping system, a budget, and an emergency savings fund.
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We will also manage various expenses such as housing, transportation, insurance, and the payment
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of taxes. We will also need to handle credit, savings, and educational costs. Finally, we invest in vari
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ous investment alternatives such as mutual funds, stocks, and bonds, often for retirement. As a res
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ult of all these building blocks, we are more apt to have a financially successful life.
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LO1.2 Understand how the economy affects your personal financial success.
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1. Summarize the phases of the business cycle. sw sw sw sw sw sw




Answer: The business cycle entails a wavelike pattern of rising and falling economic activity as mea
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sured by economic indicators like unemployment rates or the gross domestic product. The phases
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of the business cycle include expansion (preferred stage—
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