- DTP Success Team
DSST Personal Finance Study Guide
Updated: Aug 18
Are you gearing up to take the DSST Personal Finance exam?
If so, you're in for a treat!
The test measures your understanding of personal finance concepts and practices.
Our study guide will outline critical topics you need to know for the exam.
So read on and let's learn together!
Table of Contents
1. Foundations
Foundations: Financial goals, budgeting, financial statements, and cash management.
Budgeting: The basis for all financial plans.
Economic Terminology: Recession, depression, deflation, inflation, and monopoly.
Institutional Aspects of Financial Planning: The influence of banks, loans, businesses, investments, etc., on financial planning.
Time Value of Money: money available at present is worth more than the same amount in the future due to its potential earning capacity.
DSST Personal Finance Trivia Question #932
2. Credit and Debt
Consumer Credit: A credit that allows an individual to purchase an item to be paid in increments.
Bankruptcy: Liquidating assets to pay debts or creating a repayment plan.
3. Major Purchases
Auto: Considerations include renting versus buying and the potential costs and savings associated with such a decision.
Housing: When people decide to rent or buy a home, they must consider initial cost, yearly cost, lost opportunity cost, and selling cost, among others.
Other Significant Purchases: This may include jewelry, boats, furniture, and other high-cost insurable items.
4. Taxes
Payroll Deductions: Payroll taxes must be withheld from an employee's paycheck.
Income: A tax governments impose on financial income generated by all entities within their jurisdiction.
Tax Planning (estimating): (1) deferring income to the following year, (2) accelerating deductions into the current year, (3) taking advantage of any expiring tax provisions.
5. Insurances
Life Policies: Term Life insurance offers the most coverage for the least amount of money and is the appropriate choice for most people.
Property and Liability Policies: Personal and family, auto, homeowners, umbrella coverage, etc.
Health, Disability, and Long-Term Policies: Major Medical covers the expenses of severe illness or hospitalization.
6. Investments
Savings Accounts and Money Markets: Savings allow you to keep your money safe while earning interest each month.
Stocks, Bonds, and Mutual Funds: Stock Exchange is an exchange on which shares of stock and common stock equivalents are bought and sold.
Sources of Information: Moody's, Morning Star, Barron's Confidence Index, Standard & Poor (S&P), etc.
DSST Personal Finance Trivia Question #727
7. Retirement and Estate Planning
Funding Retirement: IRAs, Roth IRAs, Conduit IRAs, etc.
Social Security: Depends on prior earned income and the number of years the retiree paid into the Social Security system.
Estate Planning: An activity that arranges for the conservation and transfer of property from one person to another person or entity.
8. Conclusion: DSST Personal Finance
To pass the DSST Personal Finance exam, you will need to know how to budget, establish financial goals, and understand the time value of money.
The information in this guide should give you a good foundation for studying.
Try our Personal Finance prep course and be fully prepared for your test.
Sign up, start your journey to becoming a test-taking expert, and pass your Personal Finance DSST exam!
9. Student Resources
10. References
DSST Personal Finance Fact Sheet
DSST Personal Finance Fact Sheet
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