SOLUTION MANUAL
All Chapters Included
,Personal Finance, 14th Edition By E. Thomas Garman, Chapter 1 - 17
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.
,Solution and Answer Guide
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.
ANSWER: 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.
ANSWER: 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.
ANSWER: 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?
ANSWER: 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
All Chapters Included
,Personal Finance, 14th Edition By E. Thomas Garman, Chapter 1 - 17
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.
,Solution and Answer Guide
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.
ANSWER: 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.
ANSWER: 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.
ANSWER: 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?
ANSWER: 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
