This book prepares students to meet the challenges of a changing economy by focusing on the two most important personal financial skills: planning and a basic understanding of planning techniques; and the ability to think critically and to make effective decisions.

Decision-Making Approach: The analysis employs a four-part approach to decision making that involves setting goals, listing alternatives, measuring performance, and evaluating achievement. Important in this process are the concepts of opportunity costs and marginal analysis. These topics are introduced and explained in Chapter 1 and are used extensively throughout the text.

An Emphasis on Risk and Return: At the core of financial decision making is the balancing of risk and return. This concept applies in particular to investments, but it’s also useful in decisions that involve uncertainty; thus, there is an expanded discussion of risk management in the insurance section. In the investment section, we treat risk in such a way that students can use the concept when making investments