Homework

Homework

Financial Plan Draft 3

Update your financial plan. This plan will be incomplete but will include material we have covered in class so far. Your financial plan should be a professional looking document. I would expect to follow something like the outline below. Include other items, if you think appropriate.

Part of your grade will be based upon the professional look of the plan. I do not mean that it should be in a fancy binder, a stapled document is preferred. But it should have a cover page, headings, paragraphs/bullet lists, no spelling or grammar errors, clean looking financial statements, etc. Start each major section on a new page. A table of contents would be good. For a head start, use the template.

It will build on what you already have done. Note that there are some new items to include in red.

Financial Goals

Short-term Goals
What are your needs? Be specific about amounts and timeframes.
How much money do you need?

Medium-term Goals
What are your needs? Be specific about amounts and timeframes.
How much money do you need? (do annuity calculations for each)

Long-term Goals
What are your needs? Be specific about amounts and timeframes.
How much money do you need? (do annuity calculations for each)

Total Needs
    Given all your goals, how much do you need to save each year?
    How will you do this? Is this realistic?
    Do you need to change a goal? If so, do it.

Current Financial Status
       Income statement
       Balance sheet
       Analysis - what is your savings rate? How is your liquidity and debt level? Other?
       Will your current savings rate allow you to accomplish your goals?
       How could your savings rate be improved?

Career Goals

Career 1
Career 2

Budget
       Create an income statement (cash flow statement) for the future. Going forward, what will your income and expenses look like? Show an income statement budget. (It may be the same as your current income statement but if you plan to make changes in job or spending, reflect that here.)
       If you need to adjust your goals, do it. Your budget should allow you to reach your goals. If there are other circumstances that might affect your ability to meet a goal (e.g. inheritance), list it.
       List any actions you need to take to meet your budget. E.g. job change, cuts in certain spending. Be specific.

Credit
What is your credit score?
If you need to, what will you do to improve it?

How will you protect your finances?
       This should address:
           - identity theft
           - insurance

Deliverable:

Draft financial plan.

Grading Rubric:

	A	B	C	D	F
Professionalism	Cover sheet. Typed, stapled, no spelling or grammar errors. Easy to read statements.	Cover sheet. Typed, stapled, no spelling, minor grammar errors. Easy to read statements.	No Cover sheet. Typed, stapled, minor spelling, grammar errors. Easy to read statements.	No Cover sheet. Not stapled, spelling and grammar errors Statements are not clear.	No Cover sheet. Not typed or stapled. Grammar and spelling errors. Statements are not clear.
Financial Goals	Has good list of realistic goals for each of short, medium, and long-term. Has specific amounts for each goal. Has specific timeframes for each goal. For each goal shows how much needed to save annually. Uses annuity calculation to find payment required.	Has good list of realistic goals for each of short, medium, and long-term. Has specific timeframes for each goal. For each goal shows how much needed to save annually. Does not use annuity calculation.	Has good list of realistic goals for each of short, medium, and long-term. For each goal shows how much needed to save annually.	Has list of goals.	No thought.
Goals Summary	Discusses ability to reach goals. Realizes may have to adjust goals, spending, and career.	Discusses ability to reach goals. Shows thought.	Discusses ability to reach goals.	Just shows the numbers.	None
Income Statement	Good, detailed list of expenses .	Good list of expenses.	Moderate list of expenses.	Minimal list of expenses. No detail. Have liabilities in expenses.	Minimal list of expenses. No detail. Missing savings.
Balance Sheet	Good, realistic list of assets and liabilities.	Realistic list of assets and liabilities.	Minimal list of assets and liabilities.	Have expenses in liabilities.	Assets do not equal liabilities plus net worth.
Analysis	Specific discussion of how much one could save by taking specific actions. Will calculate debt and liquidity ratios. Will discuss the savings rate and compare it to national average. If you want to really do well, compare your expenses to national averages.	Specific discussion of how much one could save by taking specific actions. Will discuss the savings rate.	General discussion of ways one could save.	Identification of minimal number of possible areas for saving.	None
Career Goals	Complete discussion of two possible careers.	Discussion of two career goals.	Discussion of one career goal.	General discussion.	Rambling thoughts.
Budget	Good, detailed list of expenses. Gives thought about future changes. Discusses ability to meet goals. Lists required actions.	Good list of expenses. Discusses ability to meet goals.	Moderate list of expenses.	Minimal list of expenses. No detail. Have liabilities in expenses.	None
Credit	Has several actions that can be taken to improve credit score.	Has few actions that can be taken to improve credit score.	Has one action that can be taken to improve credit score.		No actions.
Protecting Finances	Has several actions that can be taken to protect identity. Includes both medical and life insurance. Describes how insurance needs change with age/family	Has a few actions that can be taken to protect identity. Includes both medical and life insurance.	Has one action that can be taken to protect identity. Says will get or has insurance. Missing either medical or life insurance.	Minimal discussion.	No actions.