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Questions and Answers
What is the primary purpose of creating a budget?
What should be included when preparing a cash budget?
Which method can help limit restaurant expenditures according to the envelope system?
Which of the following is NOT a recommended practice when choosing a professional financial planner?
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How do fee-only planners earn their income?
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What does a balance sheet primarily help to calculate?
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Which aspect is NOT crucial while analyzing financial health through ratios?
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In record-keeping to track expenses and income, what is the main goal?
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What is one of the basic steps in personal financial planning?
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What are monetary assets primarily considered?
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Which of the following is an example of a liability?
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Why is it important to have an emergency fund?
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What does a balance sheet primarily provide?
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Which type of asset is considered when calculating wealth for retirement planning?
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What is meant by ‘current debt’ in personal finance?
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How does increased education about investments benefit individuals?
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What does Non-Life Insurance primarily cover?
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Which of the following is NOT a benefit of Life Insurance?
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What type of Life Insurance policy provides periodic returns?
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Which term refers to the amount guaranteed to be paid upon the insured's death?
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What is one of the main purposes of a Child’s Plan insurance policy?
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Which of the following is a characteristic of Unit Linked Insurance Plans (ULIPs)?
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What is a typical feature of the Grace Period in an insurance policy?
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What is the maximum rebate limit mentioned?
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What differentiates a Whole Life Insurance policy from other types?
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What is the first step in filing your income tax return electronically?
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Which documents are recommended for salaried individuals when filing ITR online?
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What is advised to assign to your ITR for easier processing?
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What is one of the learning objectives related to cash management?
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Which service can you engage for help with filing your income tax return?
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Which of the following is a cash management alternative you should compare?
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What is one of the key components of personal financial planning relating to taxes?
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What is one of the main costs associated with open credit, specifically credit cards?
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Which aspect is NOT considered when calculating creditworthiness?
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What should be the first step in making smart buying decisions?
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Which of the following is a sign of trouble with credit card spending?
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Which situation can negatively affect your credit score?
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What is an effective way to protect against credit card fraud?
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When considering the purchase of a home, which of the following should you calculate?
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What should be done before making a purchase to get the best price?
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Study Notes
Women and Personal Finance
- Taking charge of personal finances is crucial for women to secure their financial future.
- Knowledge acquisition is essential to make informed financial decisions and create actionable plans.
- Consulting a financial planner can help address specific financial concerns.
COVID-19 Impact on Finances
- The pandemic has heightened the need for effective personal financial management during emergencies.
- Understanding personal financial planning is vital for managing finances and achieving goals.
Key Steps in Personal Financial Planning
- Establish clear financial goals to guide the creation of a financial plan.
- An emergency fund is critical for protection against economic downturns.
- A more informed perspective on investments can lead to higher earnings.
- Familiarity with ten fundamental principles is foundational for financial planning.
Measuring Financial Health
- The balance sheet reflects one's financial position, detailing assets, liabilities, and net worth.
- Assets include monetary assets (cash, savings), investments (stocks, mutual funds), retirement plans, housing, automobiles, and personal property.
- Liabilities encompass current debts due within a year, such as unpaid bills and rent.
Budgeting and Cash Management
- A budget is essential for managing cash inflows and outflows, aligning income with expenditures.
- Preparing a cash budget involves reviewing past income, estimating taxes, and identifying fixed/variable expenses.
- The envelope system can help manage spending, such as setting aside a specific amount for dining.
Financial Planner Engagement
- Financial planners can either be consulted for guidance or comprehensive management of financial affairs.
- It is important to assess a planner's credentials, experience, and fee structures (fee-only or fee and commission).
Importance of Understanding Time Value of Money
- Compounding allows money to grow over time, emphasizing the importance of interest rates.
- Present value calculations help quantify future money's worth.
Income Tax Management
- Filing income tax returns electronically is straightforward, requiring PAN card and Aadhar numbers.
- It's beneficial to use Form 16 for salaried individuals when filing taxes online.
Tax-Planning Strategies
- Understanding and managing taxable income is vital for personal financial planning.
- Choosing appropriate tax-saving instruments can significantly reduce tax liability.
Cash and Liquid Asset Management
- Liquid assets are important for financial stability; understanding cash management options is key.
- Comparison of rates and services from different financial institutions helps in effective cash management.
Credit Management
- Credit cards are a major form of open credit, requiring cautious spending to avoid debt accumulation.
- Each type of credit card has different costs and rates; managing credit responsibly prevents financial trouble.
Smart Buying Practices
- Distinguishing between wants and needs is crucial for making informed purchasing decisions.
- Researching products and negotiation are essential steps in smart buying.
Insurance Categories
- Insurance is classified into Life and Non-Life (General) insurance.
- Life insurance is important for income replacement, debt repayment, educational expenses, retirement savings, and tax benefits.
Types of Life Insurance Policies
- Policies vary, including Term Plans, Unit Linked Insurance Plans (ULIPs), Endowment Plans, Money Back Plans, Whole Life Insurance, Child’s Plans, and Retirement Plans.
- Each type serves different financial goals and offers varying levels of investment opportunity.
Choosing a Life Insurance Provider
- Selecting the right insurance provider should align with personal financial goals and needs.
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Description
This quiz focuses on essential personal finance strategies for women, especially in the context of recent economic challenges like the COVID-19 pandemic. Test your knowledge on key steps in financial planning, emergency funds, and principles of measuring financial health to secure your financial future.
