FINANCIAL LITERACY EXAM 1 AND
MULTIPLE CHOICES.
What is the importance of Personal Financial Planing? - Answers--Manage the
unplanned
-Accumulate wealth for special expenses
-Save for retirement.
- "Cover your assets."
-Invest intelligently
-Minimize your payments to Uncle Sam.
Financial Planning Process - Answers-1.) Evaluate your financial health
2.) Define your financial goals
3.) Develop a plan of action
4.) Implement your plan.
5.) Review your progress, evaluate, and revise your plan.
Step 1: Evaluating Financial Health - Answers--Examine current financial situation (how
much you make, spending)
-Careful record keeping to track finances and spending.
Step 2: Define Financial Goals - Answers--Write/formalize goals.
-Attach a financial cost to each one.
-When will you need the money to achieve the goal?
-Analyze and revise your goals.
SMART
Step 3: Develop a Plan of Action - Answers--Flexibility: Life changes
-Liquidity: Immediate use of cash by quickly and easily converting an asset.
-Protection: Prepare for unexpected with insurance
-Minimization of Taxes: Keep more of what you earn.
Step 4: Implement Plan - Answers--Stick to it
- Use your financial plan as road map to achieve goals.
Step 5: Review, Re-evaluate, and Revise - Answers--Review progress
-Reevaluate and revise for changes in your life.
- Be prepared to formulate a different plan to meet your goals.
Length of Financial Goals - Answers--Short term: within 1 year
-Intermediate: 1 to 10 years
-Long term: more than 10 years
, Short-Term Goals - Answers-Accumulate emergency funds equal to 3 months' living
expenses
- Pay off bills and credit cards.
-Purchase insurance
- Purchase a major item
- Finance a vacation
Intermediate Term Goals - Answers--Save for older child's college
-Save for home improvement
-Save for a down payment
-Pay off major debt
-Finance large items (weddings)
-PUrchase a vacation home.
Long- Term Goals - Answers-Save for younger child's college
-Purchase retirement home.
-Create a retirement fund to maintain current standard of living.
-Take care of elderly family members.
-Start a business.
Age Stages: Stage 1: Early Years (Wealth Accumulation) - Answers--Prior to age 54
-Develop a regular savings pattern
-Cost of raising children
Age Stage 2: Approaching Retirement- Golden YEars - Answers--Transition years
between ages 55-64
-Depends on preparation for retirement
-Reassess financial goals and decisions- retirement, insurance protection, and estate
planning
Age Stage 3: The Retirement Years - Answers--After age 65, live off savings
-Less risky investment strategy
-Consider extended nursing home protection
-Estate planning decisions and documents are critical.
How to Be Successful in Your Career - Answers--Do bes work
-Protect right image
-Understand and work within power structure
-Gain visibility
-Work on new projects
-Be loyal and supportive of boss
-Acquire new skills and keep up with tech
-Develop a strong network
-Be Ethical
What Determines Income? - Answers--Skills
MULTIPLE CHOICES.
What is the importance of Personal Financial Planing? - Answers--Manage the
unplanned
-Accumulate wealth for special expenses
-Save for retirement.
- "Cover your assets."
-Invest intelligently
-Minimize your payments to Uncle Sam.
Financial Planning Process - Answers-1.) Evaluate your financial health
2.) Define your financial goals
3.) Develop a plan of action
4.) Implement your plan.
5.) Review your progress, evaluate, and revise your plan.
Step 1: Evaluating Financial Health - Answers--Examine current financial situation (how
much you make, spending)
-Careful record keeping to track finances and spending.
Step 2: Define Financial Goals - Answers--Write/formalize goals.
-Attach a financial cost to each one.
-When will you need the money to achieve the goal?
-Analyze and revise your goals.
SMART
Step 3: Develop a Plan of Action - Answers--Flexibility: Life changes
-Liquidity: Immediate use of cash by quickly and easily converting an asset.
-Protection: Prepare for unexpected with insurance
-Minimization of Taxes: Keep more of what you earn.
Step 4: Implement Plan - Answers--Stick to it
- Use your financial plan as road map to achieve goals.
Step 5: Review, Re-evaluate, and Revise - Answers--Review progress
-Reevaluate and revise for changes in your life.
- Be prepared to formulate a different plan to meet your goals.
Length of Financial Goals - Answers--Short term: within 1 year
-Intermediate: 1 to 10 years
-Long term: more than 10 years
, Short-Term Goals - Answers-Accumulate emergency funds equal to 3 months' living
expenses
- Pay off bills and credit cards.
-Purchase insurance
- Purchase a major item
- Finance a vacation
Intermediate Term Goals - Answers--Save for older child's college
-Save for home improvement
-Save for a down payment
-Pay off major debt
-Finance large items (weddings)
-PUrchase a vacation home.
Long- Term Goals - Answers-Save for younger child's college
-Purchase retirement home.
-Create a retirement fund to maintain current standard of living.
-Take care of elderly family members.
-Start a business.
Age Stages: Stage 1: Early Years (Wealth Accumulation) - Answers--Prior to age 54
-Develop a regular savings pattern
-Cost of raising children
Age Stage 2: Approaching Retirement- Golden YEars - Answers--Transition years
between ages 55-64
-Depends on preparation for retirement
-Reassess financial goals and decisions- retirement, insurance protection, and estate
planning
Age Stage 3: The Retirement Years - Answers--After age 65, live off savings
-Less risky investment strategy
-Consider extended nursing home protection
-Estate planning decisions and documents are critical.
How to Be Successful in Your Career - Answers--Do bes work
-Protect right image
-Understand and work within power structure
-Gain visibility
-Work on new projects
-Be loyal and supportive of boss
-Acquire new skills and keep up with tech
-Develop a strong network
-Be Ethical
What Determines Income? - Answers--Skills
