Ch. 1- Understanding the Financial Planning Process Test

Finance planning can improve your standard of living.

• True

• False

Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.

• True

• False

Tangible assets are earning assets that are held for the returns they promise.

• True

• False

It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts.

• True

• False

The need for financial planning declines as your income increases.

• True

• False

When you get your first job, you should make a good financial plan that you can follow without making changes until you retire.

• True

• False

Saving $400 for a large, flat-screen TV within the next 4 months is an example of a short-term goal.

• True

• False

Short-term planning should include creating and maintaining an emergency fund with at least 6 months’ worth of income.

• True

• False

Accumulating wealth for later years is called estate planning.

• True

• False

The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.

• True

• False