Bussines

This plan is the culmination of what you learned in class this semester while utilizing the Chapter homework and Excel sheets you’ve also completed. Below is an outline that divides each of major section of your financial plan based on the semesters learning objectives. 

Instructions: Submit your work on Canvas by uploading a Microsoft Word docx or Google doc.

Format: Based on the outlined sections below you should answer each of the points below to match the sections and subsection bullet points. If you have additional information please feel free to include that to make your plan fuller.

Responses: Complete this plan by writing your thoughts to fill out each section. Then use sections of your Personal Financial Plan Excel sheets from your homework assignment to show how you arrived at certain calculations. I suggest that you update Excel sheets to be consistent with your latest goals and what you may have learned through the course. Just cut and paste from your Excel sheet when you think it would help.

Each section is for YOU, not just for credit in the class, it is really for you to take hold of your aspirations through practical steps. So, don’t short change yourself with simple answers, go into courageous detail about what you intend to work towards. Be specific about goals and decisions to help keep sight of why you’re making the sacrifices or doing research to achieve those goals.

When the section asks for you to Reflect, utilize this time to think about how your preconceived notions of personal finance, investing or goal setting may have changed since you first worked on the homework assign, now that your reflecting at the end of the semester update any goals.

Also, when respond with your answers in each section  remember to set S.M.A.R.T Goals.

I hope this will be more than just an assignment for you, but an opportunity to plan towards and achieve your financial goals. Certainly, our goals change through life, but hopefully what you’ve learned this semester will help you to track and refine your goals towards living your best life.

Section 1 – Your Overall Goals

• List some of your top personal goals including professional, personal, and financial goals (Start by reviewing the Introductory Assignment you did at the beginning of class). Now categorize them into either short term goals (within a year), Medium tern goals (1-3 years), Long term goals (next 5-10 years), and life goals. Be specific and make them SMART goals. 


• Reflect on your goals and how they may have changed from when you first did the assignment till now. Do you look at debt differently or savings. How has concepts like the time value of money, budgeting, and trade-off changed your goals or outlook. 


• The reminder of the assignment will demonstrate your understanding of how to set and work towards some specific goals. The sections below may contain actual goals you have, but even if it does not this exercise is to demonstrate your understanding of these concepts and help you achieve these goals in the future.

Section 2 – Your Prioritized Spending List and Budget

1. Prioritize your expenses and categories for all the things you currently spend. From most important to least, think why you spend your money on them. This includes:
   
   
   
   • Recurring monthly expenses
   
   
   • Non-monthly expenses
   
   
   • Hobbies and entertainment
   
   
   
   


2. Reflect on this list and consider:

• What influenced the list of prioritizes


• What would/could you give up in order to achieve a goal faster


• Anything that surprised you when you listed your expense

1. Budget – after reviewing your most spending list above, compare it with the Chapter 3 homework assignment Personal Financial Plan Chapter 3 Excel sheet tab #18
   
   
   
   • How has your spending priorities changed?
   
   
   • Update your current budget based on your priorities (Simple update tab #18 Column C9-C28)
   
   
   • Explain how these changes help to meet your current goals, short term and long term goals. How does it also help with your Savings and Investments? (Which you will discuss Section 6)
   
   
   
   

Section 3 – Your balance sheet 

1. Net Worth Statement (Update your Chapter 3 Personal Financial Plan Chapter 3 Excel sheet tab #15)


2. From your personal balance sheet:
   
   
   
   • What is your net worth
   
   
   • How much do you spend every year on interest payments (from loans and credit cards) and what could you do with that money to reach your goals?
   
   
   • Do you consider yourself to be in a good or bad financial situation and explain why? What could you do to improve your financial situation? Is this one of your goals, if not should it be?
   
   
   • If your balance sheet looks the same as before and you might be saying you're only a student and don't have much in net worth, explain how you plan to improve this situation or develop your net worth.
   
   
   
   

Section 4 –Next Car Purchase (although you might not be in the market for a car now, it is good to understand the steps and considerations to purchasing a car)

Part A - Research Car Options (this is the same as your Chapter 8 Buy or Lease car assignment, use the research from that assignment)

1. Research a car you might want to purchase. (To answer the points below, search online)
   
   
   
   • Purchase price
   
   
   • Monthly gas costs
   
   
   • What it would do to your insurance costs
   
   
   • Estimated resale value after 5 years (depreciation use Kelley Blue Book website for current comparable aged cars of the same model)
   
   
   • Estimated annual maintenance costs (search online)
   
   
   
   

• Which car would you choose and why? (Show an understanding of the financial consequences of the choice and how it fits into your goals, for example starting a family, traveling the country, saving for retirement)

Part B - Research Financing Options

1. Loan Options
   
   
   
   • For the car you chose, research financing options for the car from two different sources (Search online from banks, credit unions, or a dealer).
   
   
   • What is the interest rate and term for each
   
   
   • What is the monthly payment
   
   
   
   

2. Lease Option

• Identify what a 3-year lease would cost you in monthly payments


• Identify the down payment and any other costs they charge


• Use your Buy vs Lease car Chapter 8 Excel sheet tab #36 (NEW SHEET) Buy or Lease Car Chapter_8_PFP .xlsx

3. Determine the down payment for either a purchase with a loan option or the amount to start a lease.

• Explain your plan to pay for this down payment, will you invest in a CD, mutual fund, or other instrument. Explain why and how you will reach that goal.

Section 5 – Real Estate or Home 

1. Identify an actual property you would like to purchase in the future. (House, condo, townhouse, apartment building. Use real estate websites like: Zillow, Redfin, Trulia)
   
   
   
   • What is the current purchase price?
   
   
   • Calculate the estimated cost in the future using a 3% inflation rate for the home based on when you would like to purchase the home. (Estimate how many years in the future you would purchase that property and then use your time value of money table)
   
   
   • Calculate the down payment (assume 15%) and then the monthly payments using an online mortgage online calculator
   
   
   • How much do you need to save in order to meet this down payment goal based on price calculated in the future.
   
   
   
   


2. Identify the Mutual Fund you will invest into each month and what is the average annual yield in order for you to fund the down payment needed. Remember find a multiple from your Time Value of Money Chart 1-B. You can choose the Mutual Fund in Section 7.

Section 6 – Planning for Retirement 

1. Figure out how much you need to save for retirement
   
   
   
   • When do you want to retire (how many years away is it)?
   
   
   • How much income per year do you want in retirement and how many years are you allocating for the term of your retirement.
   
   
   • What will be your needed retirement total account balance to fund this retirement? (Remember to use your time value of money table to solve for this)
   
   
   
   


2. Identify at a mutual funds that you can use to create your asset allocation
   
   
   
   • You will be choosing the Mutual Fund in Section 7
   
   
   • How much do you need to invest each year and for how long to achieve your retirement total.
   
   
   
   

Section 7 – Selecting your mutual funds

1. Selected TWO different mutual funds to be used for each of your two needs, home down payment (Section 5) and retirement money (Section 6). Use and include the Mutual Fund Research Chapter 16 Excel sheet tab #62 NEW SHEET Mutual Fund Research of Chapter_16_PFP.xlsx

2. Analyze two different mutual funds (Do the Fund Research Chapter 16 Sheet tab #62 twice, once for each fund, the fund you will invest for the down payment of the house and one for retirement, then attach your results)

3. Calculate (using Time Value of Money Charts, use approximate percentages) how much you need to save per year by investing to reach each of your goal?