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Planning Beginner: Principles of Financial Planning

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1.
Good financial planning is methodical in nature.
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True. It uses a set of measurable, defined procedures to create a picture of your financial life.
2.
What financial planning tool helps you plan your spending?
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Budget. A budget is a powerful tool that is usually part of any financial plan.
3.
When you work with a financial planner, he or she will draw up a document that expresses your net worth. What is this document called?
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Balance sheet. More specifically, it is called a personal balance sheet. It expresses your assets, your liabilities, and your ultimate net worth.
4.
Once you have made a financial plan, _______.
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You must review it and change it if necessary. Plans are not set in stone, and neither are they self-correcting; you must revise them over time.
5.
Which of the following is not one of the generally practiced steps in financial planning?
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Spending your money. That is a step you do on your own, hopefully once your plan is safely in place.