Financial Plan

People create and keep a personal budget to help them _____.

• set and reach financial goals

• apply for loan

• buy anything they want

• earn promotions at work

How do you begin your financial planning process

• determine your current financial situation

• identify your options

• evaluate your alternatives

• create a plan of action

Which of the following is an example of a SMART goal?

• Purchasing a new 70-foot boat in 3 years

• Starting a business in a few years that will generate $350,000

• Saving $75,000 for the down payment on a home that will be purchased in 4 years

• Retiring at the age of 70 with enough money to live comfortably

An emergency fund consists of how much money?

• 1 year of expenses

• 1 month of expenses

• 12 to 25 months of expenses

• 3 to 6 months of expenses

What is a budget?

• detailed estimate of income and expenses

• snapshot of the money coming in and going out

• money set aside for unexpected events

• money from earnings

What role does ethics play in financial planning?

• planners have a fiduciary responsibility to put their client's needs first

• it helps you list assets and liabilities

• it holds yourself accountable for decisions you make

• morals have nothing to do with financial planning

What is retirement?

• When a person no longer works

• When a person is over 65

• When a person holds themselves accountable for their financial decisions

• a way to transfer the risk of loss

What is the first step in building a financial portfolio for yoourself

• Estimate your income and expenses

• Determine your current financial situation

• Decide what you want your job to be in the future

• create a financial excel sheet

Generally accepted finance principles would support which of the following statements

• ‘High return generally equals high risk’

• ‘High return generally equals low risk’

• ‘High risk is generally inversely related to high return’

• D. ‘Low return generally equals high risk’

What is the highest weighted factor that goes into determining your credit score?

• payment history

• credit utilization

• lines of credit

• age of credit