Milady Esthetics State Board Practice Test

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Prepare for the Milady Esthetics State Board Test with quizzes. Use flashcards and multiple choice questions with hints and explanations. Excel in your exam!

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What is the first step in financial planning?

Creating a budget
Keeping track of where your money goes
Setting financial goals
Investing wisely

The correct answer is: Keeping track of where your money goes

The first step in financial planning is keeping track of where your money goes. This foundational action allows an individual to gain clarity on their current financial situation. It involves monitoring income and expenses, which provides crucial insight into spending habits and financial behavior. By understanding how money is being utilized, one can identify areas where they may need to cut back, leading to more informed financial decisions in the future. This groundwork is essential for establishing a budget, setting appropriate financial goals, and making wise investments. Without a clear picture of current finances, it is challenging to create an effective budget or set realistic goals. Tracking expenditures aids in creating a financial blueprint that ultimately supports all other planning steps.