Question

True or False to the following questions:

A life insurance policy naming a spouse or dependents as beneficiaries is an example of the impact of family structure on financial decisions:

Your willingness and ability to assume risk increases with dependents, and a desire for more financial protection decreases.

Personal financial planning includes decision making about education, employment, housing, transportation, and lifestyle.

Financial decisions are based on personal goals, opportunities, and risks.

Most people begin their independent financial lives by selling their labor to create an income.

Taking a second job, becoming unemployed, entering a new career, or becoming self employed are as important as career choices in personal financial planning.

Sound personal financial planning is based on a thorough understanding of your personal circumstances and goals.

Personal financial planning includes decision making about earning, spending, saving, and investing.

Because of unpredictability, how you finance your life does not significantly affect the life you live

Personal financial planning is a life-long process, not just for when you are starting out.

Answer 1

TRUE -A life insurance policy naming a spouse or dependents as beneficiaries is an example of the impact of family structure on financial decisions.

The life insurance is basically mean to support your dependants in case something happens to you and you are the one who supports the family livelihood. Hence, the purpose fulfilled only when you add on the beneficiary (nominee) to your life insurance policy (which is a mandate otherwise you can't enter into such contract without a beneficiary

FALSE- Your willingness and ability to assume risk increases with dependents, and a desire for more financial protection decreases.

Basically, risk doesn't increase with more dependants, but there are several other factors which increase the risk of individual such as your habits, your occupation, the environment you live in. But, yes this is also true any individual realises the risk when he has dependents. Also, with the  increase in risk as well as more dependents any individual starts thinking of more financial protection.

TRUE- Personal financial planning includes decision making about education, employment, housing, transportation, and lifestyle.

Personal financial planning includes all the above mentioned as well if you have a family then your individual financial planning also includes the needs of the family members, more importantly, your dependants' education, livelihood, your employment and retirement planning all comes under individuals financial planning.

TRUE- Financial decisions are based on personal goals, opportunities, and risks.

In short, we can say that Financial decisions are all about managing all of them (personal goals, opportunities and risks). But these three factors are very critical as requires lot of efforts and decision making to come up with better financial planning.

Personal Goals require a proper evaluation process which includes best alternatives needs to be considered, also implementing the same as well as review the same time to time. It includes various risks also, such as personal risk, income risk, inflation risk etc hence need to take everything with best possible manner.

TRUE-Most people begin their independent financial lives by selling their labor to create an income.

yes, this is so true and that is how the process of employment works and people spend their livelihood.

TRUe- Taking a second job, becoming unemployed, entering a new career, or becoming self employed are as important as career choices in personal financial planning.

FALSE- Sound personal financial planning is based on a thorough understanding of your personal circumstances and goals

TRUE- Personal financial planning includes decision making about earning, spending, saving, and investing.

TRUE-Personal financial planning is a life-long process, not just for when you are starting out.