Overview
In this milestone, you will begin to establish a personal financial plan that reflects what you have learned in this course so far. Now that you see the value of developing short-term, intermediate-term, and long-term financial goals, you will be able to plan appropriately, make adjustments to reflect your intentions, and outline steps to make necessary changes to achieve your goals. In this milestone, you will establish your personal financial goals and develop your personal financial statements: a balance sheet and a simplified income statement. You will submit this milestone in Module Three.
Note: If you do not wish to disclose personal financial information to your instructor, change your information or provide an alternative name with the information realistically portrayed. In doing so, the experience of preparing a financial plan for another person will prepare you to accurately complete your own plan when you are ready. Also, do not disclose the information of someone other than yourself; remember to keep private information private.
Directions
In this milestone, complete the worksheets listed below (which accompany your textbook) and a short summary. These worksheets can be found in the MyFinanceLab Multimedia Library section of your MyFinanceLab. You will go to the Pearson website to access these Worksheets.
Worksheet 1: Personal Financial Goals Worksheet
On this worksheet, you will identify, prioritize, and organize your personal financial goals. Note that establishing an emergency fund and eliminating credit card debt are listed as potential considerations. Referring to Chapters 1, 2, 5, and 6, contemplate how you might prioritize the use of your resources. Once completed, this worksheet will serve as the basis for your personal financial plan. (Note: The goals on the template are examples. If an example goal applies to your financial situation, use it. If it does not apply, delete it. Add goals that are specific to your personal financial situation.)
Worksheet 2: Financial Objectives Worksheet
On this worksheet, you will have the opportunity to rank the importance of personal financial objectives, specifically those that are longer term plans. Noting the relevancy to most people’s long-term plans, this document allows you to consider your existing and future anticipated requirements of resources for education, family, health, and retirement needs. Complete this comprehensive list and consider any relevant planning requirements that you will need to initiate now. If you have financial objectives that are not listed on the template, there is room at the bottom to add and rank your own objectives.
Worksheet 4: Balance Sheet Worksheet
On this worksheet, you will document your net worth by completing the required elements of a personal balance sheet. You may refer back to Chapter 2 of your textbook for an example of a completed balance sheet. There are two tabs, so ensure both are complete. Include all of your assets (everything you own) on the first tab and all of your liabilities (everything you owe) on the second tab. Consider that you will be revising your plan in the future according to anticipated changes to your financial situation or in future weeks when you consider the impact of home ownership and other major financial decisions. As you are completing the balance sheet, try to identify potential future changes to your assets and liabilities.
Worksheet 5: Simplified Income Statement Worksheet
On this worksheet, you will determine how much of your income is available for savings and investment to fund your financial goals. You will do so by completing the required elements of a personal income statement. See Figure 2.6 in Chapter 2 of your textbook for an example of a completed personal income statement. Include your take-home pay (adjust for income taxes) and your total living expenditures. Consider that you will be revising your plan in the future according to anticipated changes to your financial situation or in future weeks when you consider the impact of home ownership and other major financial decisions. As you are completing the simplified income statement, try to identify potential future changes to your income and expenses.
Short Paper: Write a short paper (2–3 pages). Include the following rubric criteria:
What did you observe while completing these worksheets in terms of your personal financial challenges and opportunities?
Explain each worksheet, specifically, indicating precise line items that concern you.
Specifically discuss your emergency fund. Do you have a sufficient emergency fund? If not, what steps will you take to establish a sufficient emergency fund?
Specifically discuss your credit card debt. Do you have outstanding credit card debt? If so, what steps will you take to eliminate this debt?
What to Submit
Submit a 2- to 3-page Microsoft Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Use discipline-appropriate citations. Your supporting research should be as up to date as possible. Any news stories, press releases, or additional sources must be dated within the last 60 days. Company data should be no more than one year old. Using older data may result in being asked to resubmit your work. Submit Worksheets 1, 2, 4, and 5.