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Personal Finance DSST
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Free Personal Finance DSST Study Guide

Name of Exam: Personal Finance DSST

Number of Questions: Around 100 (varies)

Time Limit: 120 Minutes

ACE Recommended Passing Score: 400

Practice Test Available?: Yes (for old version) - Click Here

Cost: $80 + Sitting Fee (Usually no more than $20) at your testing site. Military can take DSSTs for free with Tuition Assistance. Check with your Educational Officer!

Difficulty 1-5 : 3
(One being the easiest, and five being the hardest)

Exam Description:

The Personal Finance DSST covers what a student would learn during a single semester of a college Personal Finance class.

A few of the specific topics you'll see see are: Estate Planning, Certificates of Deposit, Income, Time Value of Money, and Consumer Credit.

Personal Thoughts:

The Personal Finance DSST was recently refreshed, but the difficulty doesn't seem to have changed much. General consensus is that if you're familiar with investing, have ever had a mortgage, and understand the way credit works, you're almost there already.

For those who are already subscribed, InstantCert has a good track record with this exam, and the flashcards seem to have been updated with the refresh. For those who aren't, I'll do my best to hit all the big ticket items below.

Remember, it's often not enough to know what something is on this exam, but also how it's used. Points in a mortgage are a good example of this. In a scenario where you're given the selling price, down payment, etc -, you should be able to determine what the points are going to cost in the end.

Exam breakdown:

Make sure you check out the Official DSST Fact Sheet for this exam.

Pay attention to the bottom of the fact sheet. It contains some sample questions that closely mimic the type of scenario-based questions you'll see on the actual exam.

The Personal Finance DSST is broken down as follows:

15% Credit and Debt
15% Major Purchases
15% Taxes
15% Insurance
15% Investments
15% Retirement and Estate Planning
10% Foundations

Areas of Study

I'm going to list some specific topics that you'll need to study.

Though there are different versions of the Personal Finance DSST, you'll most likely see some of the following on your exam:

  • Social Security
  • Budgeting
  • Health Policies
  • Bankruptcy
  • Stocks
  • Annuities
  • IRA's
  • Wills and Estates
  • Auto Purchases
  • Taxes
  • Capital Gains
  • Trusts
  • Interest over time
  • Bonds

This is not a comprehensive list of topics! I highly recommend (as always) signing up for InstantCert and seeing the Specific Feedback section for this exam. They've had years to accumulate their information, and it shows.

Credit and Debt
(15% of the Personal Finance DSST)

  • Debt - Wikipedia Entry - I'd read the entire page if you have the time. If not, hit the different types and uses of debt, as well as the Ratings, Risk, and Cancellations portions.
  • Credit - Wikipedia Entry - Much like the above, I'd read the entire page (it's short). Pay particular interest to the Consumer Credit section and follow the links contained therein.
  • Credit History - If you've ever owned a credit card you should have a basic understanding of how this works. Just know the determining factors.
  • Bankruptcy Explained - A pretty clear explanation of the different chapters of bankruptcy. Make sure you look at the related terms on the right.

Major Purchases
(15% of the Personal Finance DSST)

  • How to buy a house - If you've already gone through the process of buying a home, this may just be a quick refresh. If you haven't, I'd start at number 1 on the menu to the left and work your way down to 20. Skip over the steps that don't apply to the finance portion like property taxes, mortgages, etc. Make sure you pay attention though, there's a pretty good explanation of Mortgage Points and ARM's on number 11 that is easy to miss.
  • How to buy a car - I'll admit it, this is entirely too much information for what you'll need for the Personal Finance DSST. Everyone who ever plans to buy a car should read this though. For the exam - Skip down to the budget portion as well as the "Foolishly Pricing Vehicles" sections for the stuff that applies (MSRP, holdbacks, MIP, etc)

(15% of the Personal Finance DSST)

  • Income Tax - Wikipedia Entry - Just a quick read will do. We're going to hit the more specific kinds of tax below.
  • Capital Gains Tax
  • Payroll Taxes
  • Estate Taxes
  • IRS Tax Forms - Understand when you'd use each and what they apply to. I'd also look at the ones on the bottom like the Schedule C and D.
  • Tax Deductions and Tax Credits - I used to volunteer at the base tax center and this is one of the most misunderstood subjects when doing taxes. Make sure you understand the two. Just remember - Credits = dollars off of your tax. Deductions = dollars off of your taxable income.
  • More IRS Forms - A much more detailed list. Know the 1040's and the more common schedules as mentioned above. In addition, you'll want to hit all the ones that are part of everyday life - 1099, W2, W4, W9. Most people will be at least somewhat familiar with these so it shouldn't be tough to cover what you'll need for the Personal Finance DSST.

(15% of the Personal Finance DSST)

  • Wikipedia - Insurance - Can't start this off without a huge wikipedia page for you to read. ;) We're going hit some of the more popular types of insurance by themselves, but I'd still be familiar with the terminology like premium, indemnify, etc. Reading this entire page will prepare you for quite a few questions on the Personal Finance DSST.
  • Life Insurance Types
  • Different types of Insurance - Sums them all up rather nicely. The only thing missing is disability insurance, which you can find below.
  • Disability Insurance - Read the entire page. Follow the links to worker's compensation and social security and read up on those as well. Know when you qualify for the two and what the percentage of payout is.
  • Cobra - Pretty straightforward.

(15% of the Personal Finance DSST)

  • Different Types of Investments - Besides the annoying text highlight thing they've got going, it gives you a pretty good overview. I'll touch on each below.
  • Certificate of Deposit
  • Bonds
  • Mutual Funds - Make sure you see the "Different Types Of Funds" and "Picking a Mutual Fund" sections. Both have information you'll most likely need to know for the Personal Finance DSST.
  • Bank Accounts - Lists three of the more popular, including Money Market accounts.
  • FDIC - You've seen it mentioned many times over the last few topics. You'll want to know what it insures and what it doesn't. If asked how much it insures, this could get tricky. The Personal Finance DSST was refreshed in early 2008, when the amount was still $100,000 per account. If they have a $250,000 (current amount) choice, I'd choose that one. You can always argue that it's the correct answer if you need the points.

Retirement and Estate Planning
(15% of the Personal Finance DSST)

  • Retirement Plans List (Simple) - Not a bad list and covers almost all of the retirement plans in one place. I'm going to include one below from the IRS website that goes into more detail.
  • Retirement Plans List (Detailed) - You'll have to click on each type to get to the meat of things, but it covers them extremely well. The IRS loves to change web page names with little notice, so if this link doesn't work just let me know with the "Contact Us" form.
  • Trusts and Wills - More than you'll need probably, but good information for anyone who wants to read more on the subject. Hit the links that explain what each is and what happens if there isn't one. Know the terms like executor, probate, etc.
  • Bonds
  • Mutual Funds - Make sure you see the "Different Types Of Funds" and "Picking a Mutual Fund" sections. Both have information you'll most likely need to know.
  • Social Security, Medicare, Medicaid - The link will take you to Wikipedia's entry on Social Security. I'd read the entire page as there will most likely be questions on the topic. At the top, you'll also find links to other programs that you'll need to know. Hit the big named items like Medicare and Medicaid. May as well read Unemployment Benefits while you're here. Never know when the information may come in useful.

(10% of the Personal Finance DSST)

  • Financial Glossary (Simple) - The trick is not in finding a glossary of Personal Finance terms, but rather finding one that won't overwhelm everyone. I'm going to start it off simple with some of the more basic terminology you'll need. The next link will be a full-bodied glossary.
  • Financial Glossary (Full) - To be honest, I'd learn all of these. You'll know some of them already, so it shouldn't take that long.
  • Budget Wikipedia Entry - Check the bottom, just a basic understanding of how budgets work should suffice.
  • Time Value of Money - Some people have this on their Personal Finance DSST and some don't. If you do get a question on TVM, it seems it's usually in the form of a problem that you must answer. This is the simplest explanation I could find for what TVM is, and if you have no experience in this subject I'd go through each page of the tutorial.

Recommended bargain-priced study resources

Always check your library first! You may be able to find some of these for free. You don't have to buy the officially recommended resources all the time. If you're the type of person that prefers to study from a textbook source however, then please see below.

Official DSST Test Preparation Online Book - This is actually free if you follow the directions on this page. The book is to the right on the last screen shot. Get yourself a copy.

Personal Financial Planning 11th Edition - One of the suggested textbook for the Personal Finance DSST. There are both older and newer versions available on Amazon. I linked to the 2008 version because it's the version they used on the refreshed exam, but it's still pretty pricey. Check your library first.

InstantCert Academy Personal Finance Specific Exam Feedback - Only two pages of exam feedback, but frankly that's all you really need. Great feedback left by IC members on how their test was. Also, don't forget to check out the Personal Finance DSST InstantCert Flashcards.

If you don't know what InstantCert is, then click here for the scoop as well as a discount code: **InstantCert Academy**

You'll find an InstantCert link for every exam here if that gives you an idea of the amount of information they have available. It's an outstanding resource.

Closing Thoughts

According to most of the feedback I've seen, the refreshed version of this exam is about as comparable in difficulty to the old exam. InstantCert is often cited as being enough to pass, and I've hopefully filled in any gaps with the above material.

If you take the exam and find something that I've missed, please let me know in the User Submission area for this exam. We're always looking to improve!

Best of luck!

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