Creating your personal financial plan is a major requirement of this course. It should consist of a completed Word document and an Excel workbook. The Word document is below. Add your answers directly to the file. Your Excel workbook should complete three worksheets (taxes, debt, and retirement) to provide the calculation for your Word document. You will be scored based upon the feasibility, plausibility, and thoroughness of your plan.
Must create a personal financial plan. it can be made up but with correct and legit answers. Also correct numbers on the excel worksheet.
Personal Financial Plan
FIN 2010 Personal Financial Planning
Name: (Insert Your Name Here)
Briefly answer each of the following questions about yourself.
· What are my passions, those things that I have an intense desire or enthusiasm for?
· What do I do best?
· What activities do I need to be a regular part of my life?
· What gives me energy?
· What am I willing to sacrifice for?
· Whom do I want to help in life? How can I help them?
· What do I love to do?
Define Your Goals
State at least three short-term, three medium-term, and three long-term personal goals.
Short-term Goals (Examples: pay off credit card debt, go on vacation)
Medium-term Goals (Examples: get married, pay off student loans)
Long-term Goals (Examples: pay for children’s college, retire early)
Assess Your Current Financial Situation
Provide the details on your current financial situation.
Monthly Inflows (Examples: wages $1,000; parental allowance $500)
Monthly Outflows (Examples: rent $500, food $300, car payment $350)
Assets (Examples: car $10,000; savings $1,000; personal items $2,000)
Liabilities (Examples: car loan balance $12,500; student debt $35,000; credit card debt $800)
Describe your payment schedule and interest rate for each liability. (Examples: Equal monthly payments due after graduation for ten years at 6% interest, equal monthly payments of $350 for 20 months remaining)
Assess Your Future Financial Situation
Likely your future financial situation five years after graduation will be substantially different than your current financial situation. State your future career plans and estimate your annual earnings. Provide the source of your estimates. Need ideas? Check out the Bureau of Labor Statistics career exploration page: https://www.bls.gov/k12/content/students/careers/career-exploration.htm
Future Career Plan A:
Estimated Annual Income:
Future Career Plan B:
Estimated Annual Income:
Forecast your future monthly inflows and outflows five years after graduation based on your career plan A. State your sources. Use the FIN 2010 ‘Personal Financial Plan’ spreadsheet file to help you with estimating monthly expenditures on debt and taxes. Don’t forget to include taxes, insurance, transportation, food, and utilities in your monthly outflows.
Monthly Inflows (Examples: wages $3,500; investment income $200)
Monthly Outflows (Examples: house payment $1,000; student debt payment $400)
Preparing for the Unexpected
For each of the following life circumstances, state how you will prepare in advance to address each situation financially.
· An unexpected $300 expense
· Your wallet or purse is stolen and you discover there are fraudulent charges on your credit card
· A car accident results in $5,000 in damages and six weeks out of work
· Strong storms cause approximately $20,000 damage to your home
· A medically necessary surgery with three days of hospitalization
· Unexpected early death
Investing for the Long Run
Many employers provide a retirement benefit, such as a 401(k) account, and may provide matching contributions into your account. State your planned choice in each situation.
· Your employer provides a traditional 401(k) account; however, no matching funds are provided. What percentage of your salary per month do you plan to contribute?
· Your employer provides a traditional 401(k) account and will match your contribution up to 5% of your salary if you put in at least 5% of your salary each month. What percentage of your salary per month do you plan to contribute?
· Your employer provides a menu of low-fee investment options for your 401(k) account that include the employer stock, a money market fund, a mutual fund specializing in government bonds, and a mutual fund that invests in both domestic and international stocks. What percentage of your monthly contribution will you allocate to each option?
· employer stock:
· money market fund:
· bond fund:
· equity fund:
· Your employer begins providing a Roth 401(k) account as an alternative to the traditional 401(k) account. Will you switch your monthly contribution to a Roth account? Why or why not?
· Use the FIN 2010 ‘Personal Financial Plan’ spreadsheet file to help you with estimating how much your retirement account will reach by the start of your retirement.
estimated retirement account balance at retirement:
estimated retirement account yearly withdrawal:
|This spreadsheet file contains three worksheets (Taxes, Debt, and Retirement) to assist you with completing your personal financial plan.|
|Click on the tabs below to access each worksheet.|
|You should save this file when complete and submit it to the Dropbox folder on D2L along with your completed personal financial plan Word document.|
|This worksheet helps you estimate how much you will owe in federal income tax given the current federal income tax rates effective 2020.|
|Individual Taxpayers||If Taxable Income is Between:||The Tax Due is:|
|0 – $9,875||10% of taxable income|
|$9,876 – $40,125||$987.50 + 12% of the amount over $9,875|
|$40,126 – $85,525||$4,617.50 + 22% of the amount over $40,125|
|$85,526 – $163,300||$14,605.50 + 24% of the amount over $85,525|
|$163,301 – $207,350||$33,271.50 + 32% of the amount over $163,300|
|$207,351 – $518,400||$47,367.50 + 35% of the amount over $207,350|
|$518,401+||$156,235.00 + 37% of the amount over $518,400|
|Enter your estimated annual earnings in cell B14 below. Monthly salary, annual taxes, and monthly taxes are calculated automatically.|
|This worksheet helps you estimate how much you will owe each month on debt, such as credit card balances, car loans, student loan debt, and home loans.|
|Enter the total amount of debt in cell B5 below, the payoff period in years in cell B6 below, and the annual interst rate in cell B7 below. The monthly payment to payoff the debt balance within the payoff period is calculated automatically.|
|Total Debt Balance||$10,000|
|Payoff Period in YEARS||10||years|
|Annual Interest Rate||5%|
|This worksheet helps you estimate how much you can accumulate in a retirement account while working and how much you will be able to withdraw each month in retirement.|
|Enter your annual salary in cell B6 below, the percentage of your salary you plan to contribute to your retirement account in cell B7 below, and your estimated years of work in cell B8 below.|
|This example calculates automatically the assumption that your employer will match your contribution up to 5% of your salary if you put in at least 5% of your salary each month.|
|Your % contribution:||4%|
|Years of Work:||30||years|
|Enter the percentages below that you plan to allocate to each category of investments during your working life. You estimated total accumulated balance upon retirement is calculated automatically.|
|Money Market Fund:||100%|
|Estimated Balance at Retirement||$16,424.18|
|Enter the number of years you plan to make equal monthly withdrawals from your retirement account.|
|Years of Retirement:||30||years|
|Enter the percentages below that you plan to maintain to each category of investments during your retirement years. Your estimated monthly withdrawal amount is calculated automatically.|
|Money Market Fund:||100%|
|Estimated Monthly Withdrawals:||$60.71|