Summarize the benefits of participating in a high-deductible health care plan at work.
> During slow economic times, the federal government’s budgeting priority often is to borrow so it can spend more money than it takes in. What happens to families that try that, and why?
> People regularly make decisions in career planning that have trade-offs. Identify some benefits and costs people are faced with as well as two lifestyle trade-offs.
> What would you do if you inherited $3,000 from an aunt? Identify three options.
> Thinking about some common mistakes that people make in job interviews, which three are the worst? Make a short list of things people should do to improve success in an interview.
> What are some common mistakes that people make in personal finance? Name two that might be the worst, and why?
> Samantha Beliveau of Ames, Iowa, is a senior in college, majoring in nutrition. She anticipates getting married a year or so after graduation. Samantha has only one elective course remaining and is going to choose between an advanced class in sociology a
> Where is the United States in the economic cycle now, and where does it seem to be heading? List some indicators that suggest in which direction it may move.
> List three interviewing tips for new college graduates looking for employment when in many parts of the country a growing job market exists.
> You plan to retire in 40 years. To provide for your retirement, you initiate a savings program of $4,000 per year yielding 7 percent. What will be the value of the retirement fund after 40 years? (Hint: Use Appendix A.3 or visit the Garman/Forgue compan
> You want to create a college fund for a child who is now 3 years old. The fund should grow to $60,000 in 15 years. If an investment available to you will yield 6 percent per year, how much must you invest in a lump sum now to realize the $60,000 when nee
> Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000 from her grandmother’s estate. She plans to use the money for the down payment on a home in ten years when she finishes her education. Ri
> Invest Now or Later? Twins Natalie and Kaitlyn are both age 27. They both live in Warren, Ohio. Beginning at age 27, Natalie invests $2,000 per year for ten years and then never sets aside another penny. Kaitlyn waits ten years and then invests $2,000 pe
> What would be the marginal tax rate for a single person who has a taxable income of (a) $31 ,560, (b) $58,150, (c) $66,450, and (d) $100,580? (Hint: Use Table 4-2.) Table 4-2: Table 4-2 Tax Rate Schedules DO IT IN CLASS Single Individuals If taxable
> What would be the tax liability for a single taxpayer who has a gross income of $50,050?
> Leyia and Larry Hartley of Columbus, Ohio have decided to start a family next year, so they are looking over their budget (illustrated in Table 3-5 as the “young married couple”). Leyia thinks that she can go on half-s
> Cody Sebastian, of Lubbock, Texas, earns $60,000 a year. He pays 30 percent of his gross income in federal, state, and local taxes. He has fixed expenses in addition to taxes of $1,800 per month and variable expenses that average $1,400 per month. What i
> Survey two relatives or friends and ask about their decision-making process when they most recently bought a vehicle. Find out if they thought about the opportunity costs when making the purchase. Also ask if they used marginal costs in their thinking. M
> Review the financial statements of Victor and Maria Hernandez (Table 3-2 and Table 3-3) and the financial ratios on page 87 and respond to the following questions: (a) How would you interpret their investment assets to total assets ratio? The Hernandez
> Tyler Winkle’s employer in Pittsburgh makes a matching contribution of $2,000 a year to his 401(k) retirement account at work. If the dollar amount of the employer’s contribution increases 4 percent annually, how much will the employer contribute to the
> Using the Rule of 72, calculate how quickly $1,000 will double to $2,000 at interest rates of 2 percent, 4 percent, 6 percent, 8 percent, and 10 percent.
> Using the present and future value tables in Appendix A, the appropriate calculations on the Garman/Forgue companion website, or a financial calculator, calculate the following: (a) The amount a person would need to deposit today to be able to withdraw $
> Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial questions for the next three years of school and beyond. Answers to these questions can be obtained by using Appendix A or the Garman/Forgue companion website.
> Julia has recently undergone a severe career crisis. After nearly ten years as a professional engineer, her position was phased out by her company due to a loss of government contracts, and she has been offered a position in the marketing department. The
> Jacob Marchese of Vancouver, Washington, is the credit manager for a regional chain of department stores. He has been asked to join a panel of community members and make a ten-minute speech to graduating high school seniors on the topic “Using Credit Wis
> Julia has been thinking about the purchase of a boat. As a teenager, she was an avid water skier at her parents’ summer home. Now that she has moved away, she wants to renew her hobby at a lake nearby. Julia recently received a raise of $200 per month an
> Victor and Maria have always enjoyed a close relationship with Maria’s niece Teresa, who graduated from college with a pharmacy degree. Teresa recently asked Maria for some assistance with her finances now that her education debts are coming due. She owe
> Harry and Belinda have a substantial annual joint income—more than $125,000, in fact. Nevertheless, they expect to experience some cash-flow deficits during the months of November and December of the upcoming year (see Tables 3-6 and 3-
> Throughout this book, we will present a continuing narrative about Victor and Maria Hernandez. Following is a brief description of the lives of this couple. Victor and Maria, both in their late 30s, have two children: Jacob, age 13, and Nicholas, age 15.
> Asset Management Kwaku Addo, a licensed physical therapist from Topeka, Kansas, earns $4,200 per month take-home pay and has the funds directly deposited in his checking account. He spends only about $3,500 per month, and the excess funds have been build
> Julia’s six-figure salary has allowed her to build up a considerable cash reserve of over $20,000. She initially had basic checking and savings accounts. She also has a credit card with her bank that she uses to make most of her purchases, thereby earnin
> Fast The Hernandez family is experiencing some financial pressures, even though the couple has a combined income of $85,000. Also, their eldest son, Joseph, will start college in only three years. Maria is contemplating going to work full time to add abo
> Review Figure 4-1 on page 117 and comment on the logic of how different segments of Victoria Bassett’s income is taxed. Figure 4-1: Figure 4-1 How Your Income Is Really Taxed (Example: Victoria Bassett with a $60,000 gross income,
> Carson Wentz, of Philadelphia, determined the following tax information: salary, $144,000; interest earned, $2,000; qualified retirement plan contribution, $6,000; personal exemption, $4,050; itemized deductions, $10,000. Filing single, calculate Carson’
> Jared Goff, of Los Angeles, determined the following tax information: gross salary, $160,000; interest earned, $2,000; IRA contribution, $5,000; personal exemption, $4,050; and itemized deductions, $8,000. Calculate Jared’s taxable income and tax liabili
> Find the tax liabilities based on the taxable income of the following people: (a) married couple, $92,225; (b) married couple, $74,170; (c) single person, $27, 880; (d) single person, $56,060. (Hint: Use Table 4-3.)
> Describe two professional certification programs for financial planners.
> What are the four different ways financial planners may be compensated?
> In January, Harry and Belinda Johnson had $10,660 in monetary assets (see page 109): $1,100 in cash on hand; $1,200 in a statement savings account at First Credit Union earning 1.0 percent interest; $4,000 in a statement savings account at the Far West S
> How does a professional financial planner differ from a local lawyer or insurance person in your community?
> Identify three ways you might more effectively communicate about money matters.
> Explain why it is difficult for many people in relationships to talk about money matters.
> Explain what a cash-flow calendar accomplishes. Name three techniques to control spending.
> How might one go about revising budget estimates to create a balanced budget?
> What are budget estimates? Offer some suggestions on how to go about making budget estimates for various types of expenses.
> Explain why setting financial goals is an important step in budgeting.
> Name different ways to handle budget variances.
> List two ways you can maximize the benefits from a tax-sheltered retirement program.
> Create a math example of why many employees participate in a tax-sheltered employee benefit plan, such as an HSA or 401(k) plan
> Kate Beckett and her two children, Austin and Alexandra, moved into the home of her new husband, Richard Castle, in New York City. Kate is a novelist, and her husband is a police detective. The family income consists of the following: $60,000 from Kate&a
> What is a flexible spending account and what do pretax dollars have to do with it?
> Distinguish between Chapter 7 and Chapter 13 bankruptcy, and explain who might be forced to use Chapter 13 rather than Chapter 7.
> What services are provided by a credit counseling agency, and how might a debt management plan work to provide relief for someone who is having debt problems?
> List the major provisions of the Fair Debt Collection Practices Act.
> Identify four signs of over indebtedness.
> Summarize the rules that apply if you lose your ATM or debit card and it is used without your authorization.
> List the steps you should take if you find an error in your monthly statement regarding an electronic transaction.
> Distinguish among credit cards, debit cards, and stored-value cards.
> Summarize what you know about Bitcoin.
> Julia does well financially because she earns a good salary as an engineer, is somewhat frugal, and is making the maximum contribution to her employer-sponsored retirement plan. After reading about ways to decrease her income tax liability, she has some
> Use Table 1-1 to calculate the future value of (a) $2,000 at 5 percent for four years, (b) $4,500 at 9 percent for eight years, and (c) $10,000 at 6 percent for ten years. Table 1-1: Table 1-1 Future Value of $1 After a Given Number of Periods Pe
> Explain the difference between simple interest and compound interest, and describe why that difference is critical.
> What are the two common questions about money?
> Summarize how to fix errors in your credit report, and explain why some people add a consumer statement to their report.
> Name three steps to help establish a good credit history.
> What is a credit history, and what role do credit bureaus play in the development of it?
> Distinguish among the credit terms: prescreened, invitation-to-apply, and preapproved.
> Differentiate between ownership via joint tenancy with right of survivorship and tenancy in common.
> Explain why correctly owning assets is important to the personal finances of people, especially couples.
> Identify three strategies to avoid overpayment of income taxes, and summarize the essence of each.
> Several years have gone by since Harry and Belinda graduated from college and started their working careers. They both earn good salaries. They believe that they are paying too much in federal income taxes. The Johnsons’ total income la
> Summarize the differences between a traditional individual retirement account (IRA) and a Roth IRA.
> Explain how to reduce income taxes via your employer, and name three employer sponsored plans to do so.
> Distinguish between two major types of tax-sheltered investment returns
> Name three financial records that might be best kept in a safe-deposit box or in an envelope at a safe place like at work.
> List some advantages of keeping good financial records.
> Give three suggestions on how to succeed in an interview.
> Give examples of how to identify specific job opportunities.
> Offer suggestions on correctly assembling a résumé and what style formats are available.
> Give two career advancement tips.
> Explain how to compare salary and living costs in different cities.
> A Couple Creates an Educational Savings Plan Stanley Marsh and Wendy Testaburger of South Park, Colorado, have two young children. They both work and earn a substantial income, over $100,000 annually. Their monthly budget is illustrated in Table 3-5 on p
> Describe and give an example of how your marginal income tax rate can affect financial decision making.
> Explain and give an example of how marginal utility and marginal cost makes some financial decisions easier.
> Define opportunity cost and give an example of how opportunity costs might affect your financial decision making.
> What is the best thought on the list of keeping student loan debt under control?
> Summarize the effects of increasing debt payments from 10 percent to 15 percent on a budget. (Hint: See the Run the Numbers worksheet.) Worksheet: RUN THE NUMBERS Make Spending Reductions to Pay for Increasing Credit Usage 15 percent perhaps for a v
> What are the borrower’s feelings when he/she has a limit of debt of 11 to 14 percent of disposable personal income compared to a debt limit of 15 to 18 percent? (Hint: See Table 6-1.) Table 6-1: Table 6-1 Debt-Payment Limits as a P
> Distinguish among the continuous debt method, debt-to-income, debt payments-to-disposable income, and debt-to-income methods for setting your debt limit
> Explain the benefits and drawbacks of certificates of deposit.
> Distinguish between a money market account and a money market mutual fund account.
> Summarize what happens when you write a check.
> Julia Price Thinks About Financial Statements, Tools, and Budgets Julia graduated over six years ago in aeronautical engineering and changed job once. Her income is more than sufficient for her needs. Julia contributes the maximum into her employer’s ret
> Explain why opening a checking account and a money market account are appropriate actions for most people, and tell how each will be used.
> List five examples of tax credits.
> What advice on filing a Form 1040X can you offer someone who did not file a federal income tax return last year or in any one of the past three years?
> Distinguish between a standard deduction and a personal exemption.
> List three examples of adjustments to income.
> Give five examples of income that is excluded from IRS reporting.
> How are long-term and short-term capital gains treated differently for income tax purposes?
> Give five examples of income that must be included in income reported to the Internal Revenue Service.
