Financial Planning for Beginners

What does ESI stand for in financial planning?

• Education, Security, Investment

• Employment, Savings, Insurance

• Early debt repayment, Savings, Investing

• Economic Stability Indicator

Why is it important to have health and long-term disability insurance?

• To invest in the stock market

• It's not necessary if you're young

• Only if your employer doesn't provide it

• To cover unexpected health issues

What is the first financial step after ensuring adequate insurance?

• Paying off all debts

• Building a small emergency fund

• Contributing to a 401(k)

• Investing in stocks

What should you do if you have a 401(k) available?

• Withdraw early for expenses

• Contribute as much as your employer matches

• Only invest in stocks

• Ignore it until you have no debt

What is the recommended action for debts with over 6% interest?

• Only pay the minimum

• Invest instead of paying them off

• Pay them off starting with the highest rates

• Consolidate them into a new loan

After paying off high-interest debt, what is the next step?

• Start a new debt

• Build a larger emergency fund

• Take a vacation

• Buy stocks immediately

Which is NOT a suggested camp for using your ESI money?

• Saving for a house down-payment

• Buying luxury items

• Investing in a retirement account

• Starting a side business

What percentage of your income is recommended to save or invest?

• 5-10%

• 10-15%

• 20-25%

• 30-35%