Tutorial for test 1

Try to write until ¾ of the page

Give realistic examples

Chapter 1

1. Step 5 of the 5 steps in chapter 1

- Because circumstances happens, financial goals should be reviewed and revised
2. Importance of personal financial planning
- Prepare emergency funds for what if you lose your job
- Retirement
- Have some form of insurance to cover you
3. Establishing financial goals
4. Discuss the 3 typical individual’s financial cycle

Chapter 2

1. Balance sheet/income statement to measure your wealth

- E.g. when you are in the age of 45, what type of assets to you have? What type of liability do
you still have? What type of net worth
- Describe the type of assets that you would have with examples
- Describe what type of liabilities there is with examples
- Net worth, this is the importance of the balance sheet. Good level of net worth depends on
your goal and your place in the financial life cycle.
- Income statement, explain about it. Track your expenditures
2. Financial Ratios
- Explain what the individual ratio are there uses for
- Look at the debt obligations
- Saving ratio: effective saving is by paying yourself first
3. Why is it important to have a proper cash budget?
- Talk about cash budget to track your everyday expenses, after tax income