Personal Financial Planning Exam Review
ACTUAL UPDATED QUESTIONS AND
CORRECT ANSWERS
Babe Ruth Rule - CORRECT ANSWERS✅✅Always develop 3 plans for achieving your
financial goals
stuff happens - CORRECT ANSWERS✅✅make sure your financial plans are flexible and
liquid because...
true - CORRECT ANSWERS✅✅You should maximize your after tax earnings
30,000 - CORRECT ANSWERS✅✅If my annual salary is $40,000, what would be my
estimated take home pay?
3-6 months - CORRECT ANSWERS✅✅how much living expenses you should have saved
before you begin to invest
Daily Expense Tracker - CORRECT ANSWERS✅✅The most important piece of paper
you'll need. Helps you see where money is leaving your wallet
Pay Yourself First - CORRECT ANSWERS✅✅Saving for the future by investing 5-10% of
your paycheck
Post mortem - CORRECT ANSWERS✅✅The final step in financial planning where you
review your progress and revise your plans
false - CORRECT ANSWERS✅✅You should minimize the amount of income taxes you
pay each year
Risk-Return Tradeoff - CORRECT ANSWERS✅✅the observation that financial
opportunities that offer high rates of return are generally riskier than opportunities that offer
lower rates of return
, B D A E C - CORRECT ANSWERS✅✅A. Develop a plan of action (or 3). Develop a
budget matching income and projected expenses for the remainder of this academic year.
B. Evaluate your financial health. Record all expenses for a month to compare income and
expenses.
C. Review progress on the plan (post-mortem), reevaluate the plan, and revise the plan or
start over with a new one. Based on this year, develop a revised budget for next year based on
projected income and expenses.
D. Define your financial goals. Pay off credit card(s) by the end of this school term.
E. Implement the plan. Reduce expenses in problem areas so amounts do not exceed
budgeted projections.
procrastination - CORRECT ANSWERS✅✅Most common reason that the average
household is not in a solid financial position
Waste not, want not - CORRECT ANSWERS✅✅Babe Ruth Rule, Use your money wisely,
reduce spending
Uses of a monthly budget - CORRECT ANSWERS✅✅Estimate auto loan payments,
estimate the amount you can invest each month, figure out how to reduce your spending
Do I use it everyday - CORRECT ANSWERS✅✅how to determine if something is a
tangible asset
Reduce your spending - CORRECT ANSWERS✅✅fastest way to improve your current
financial position
16,000 - CORRECT ANSWERS✅✅your car is worth $20,000 today and you still owe
$4,000 on the auto loan. How much equity or net worth do you have in the car
Monetary asset - CORRECT ANSWERS✅✅where should you list a checking or savings
account on your balance sheet
ACTUAL UPDATED QUESTIONS AND
CORRECT ANSWERS
Babe Ruth Rule - CORRECT ANSWERS✅✅Always develop 3 plans for achieving your
financial goals
stuff happens - CORRECT ANSWERS✅✅make sure your financial plans are flexible and
liquid because...
true - CORRECT ANSWERS✅✅You should maximize your after tax earnings
30,000 - CORRECT ANSWERS✅✅If my annual salary is $40,000, what would be my
estimated take home pay?
3-6 months - CORRECT ANSWERS✅✅how much living expenses you should have saved
before you begin to invest
Daily Expense Tracker - CORRECT ANSWERS✅✅The most important piece of paper
you'll need. Helps you see where money is leaving your wallet
Pay Yourself First - CORRECT ANSWERS✅✅Saving for the future by investing 5-10% of
your paycheck
Post mortem - CORRECT ANSWERS✅✅The final step in financial planning where you
review your progress and revise your plans
false - CORRECT ANSWERS✅✅You should minimize the amount of income taxes you
pay each year
Risk-Return Tradeoff - CORRECT ANSWERS✅✅the observation that financial
opportunities that offer high rates of return are generally riskier than opportunities that offer
lower rates of return
, B D A E C - CORRECT ANSWERS✅✅A. Develop a plan of action (or 3). Develop a
budget matching income and projected expenses for the remainder of this academic year.
B. Evaluate your financial health. Record all expenses for a month to compare income and
expenses.
C. Review progress on the plan (post-mortem), reevaluate the plan, and revise the plan or
start over with a new one. Based on this year, develop a revised budget for next year based on
projected income and expenses.
D. Define your financial goals. Pay off credit card(s) by the end of this school term.
E. Implement the plan. Reduce expenses in problem areas so amounts do not exceed
budgeted projections.
procrastination - CORRECT ANSWERS✅✅Most common reason that the average
household is not in a solid financial position
Waste not, want not - CORRECT ANSWERS✅✅Babe Ruth Rule, Use your money wisely,
reduce spending
Uses of a monthly budget - CORRECT ANSWERS✅✅Estimate auto loan payments,
estimate the amount you can invest each month, figure out how to reduce your spending
Do I use it everyday - CORRECT ANSWERS✅✅how to determine if something is a
tangible asset
Reduce your spending - CORRECT ANSWERS✅✅fastest way to improve your current
financial position
16,000 - CORRECT ANSWERS✅✅your car is worth $20,000 today and you still owe
$4,000 on the auto loan. How much equity or net worth do you have in the car
Monetary asset - CORRECT ANSWERS✅✅where should you list a checking or savings
account on your balance sheet
