Homework

Homework

Financial Plan Draft 2

The goal of this assignment is to give you an idea of the amount you need to save to reach your goals and to adjust your spending in order to meet those goals. With this assignment you are starting to put together your full financial plan. The plan should be a typed document using this template.

First, update your income statement and your balance sheet. (Correct mistakes or omissions from your earlier submission.)

Second, update your financial goals. For each goal, you should calculate the annual savings required to reach that goal. When computing the amount you need to save each year, you may assume that your investments can earn 7% per year. You are free to use another rate, if you like. Be sure to explicitly say what rate you are assuming.

Third, do some analysis of your savings needs.

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.

The outline for the plan should look like:

Financial Goals

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

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

Long-term Goals
    What are your needs? Be specific about amounts and timeframes.
    Be sure to include an amount for retirement, if you didn't earlier.
    How much money do you need to save each year? (do annuity calculations for each goal)

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.

Financial Status
    Income statement
    Balance sheet
    Analysis - what is your savings rate? How is your liquidity and debt level? Other?

Career Goals

Career 1
These come from your earlier homework.
Career 2

Deliverables:

Updated Financial Plan. Don't forget to show your work (including any factors you get from tables).

Grading Rubric:

	A	B	C	D	F
Professionalism	Typed, stapled, no spelling or grammar errors. Easy to read statements.	Typed, stapled, no spelling, minor grammar errors. Easy to read statements.	Typed, stapled, minor spelling, grammar errors. Easy to read statements.	Not stapled, spelling and grammar errors Statements are not clear.	Not typed or stapled. Grammar and spelling errors. Statements are not clear.
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.
Analysis	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.	No thought.
Career Goals	Complete discussion of two possible careers.	Discussion of two career goals.	Discussion of one career goal.	General discussion.	Rambling thoughts.