Planning Beginner: Principles of Financial Planning

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1.
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.
2.
Tax planning is typically covered in a professional financial plan because _______.
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Taxes take a big bite out of your money. Good financial planning takes advantage of legal tax avoidance to preserve as much of your wealth as possible.
3.
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.
4.
Which step of financial planning typically calls for creating financial statements?
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Analyzing and evaluating your financial status. This is the stage where you draw up a picture of your financial status based upon data gathered previously.
5.
In order to work, financial planning requires that you _______.
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Set goals. While the other choices may eventually be necessary, the only requirement is that you set some goals.