26
Chapter Review
Summary
A fi nancial plan is a set of goals for acquiring, saving, and spending money.
The plan also includes actions or strategies for achieving the goals. Following
a fi nancial plan can help you build wealth for fi nancial security with even a
modest income. When creating a fi nancial plan, many people decide to invest
some of their money. If your investments are very successful, you may become
fi nancially independent. Investments with compound interest grow much
faster than those that have simple interest. The younger you are when you
start investing, the more your money grows during your working years.
Review
Your Knowledge
Circle the correct answer for each of the following.
1. Planning to save enough money to go on a nice vacation is an example of
a(n)
A. need.
B. investment.
C. fi nancial goal.
D. wealth.
2. Which of the following is a need?
A. Shelter.
B. Designer clothes.
C. TV.
D. Cell phone.
3. A want is
A. something essential for living.
B. an expense.
C. something important to an individual.
D. something someone would like to have but does not need to live.
4. A value is
A. something essential for living.
B. an expense.
C. a belief about ideas and principles that are important to you.
D. something you would like to have but do not need to live.