Benchmark – Personal Finance Plan

Assessment Description

The purpose of this assignment is to provide you the opportunity to apply sound financial principles and practices to the management of your current and future personal finances.

Part 1: Six Topics of Financial Planning

There are six major components of a financial plan. These include:

1. Financial (Cash Flow) Management
2. Tax Planning
3. Insurance Planning (Risk      Management)
4. Investing/Asset Planning
5. Retirement Planning
6. Estate Planning

For Part 1 of this assignment, you will complete the following pieces of your own personal financial plan.

Financial (Cash Flow) Management

• You will need your original cash flow estimate that you created in Topic 1 and your “Daily Spending Log,” in which you worked on tracking your expenses for one month. Create a spreadsheet that lists the various expense categories in one column, the dollar amounts of your original estimates of your monthly expenses in the next, and then shows your actual expenses that you tracked in your spending log in the next column. Note: Your actual expenses in many categories will likely be quite different from your original estimates. There is no need to have spent what you predicted. In fact, much awareness can come from the areas in which your estimates where different from your actual spending.
• Next, add a “Spending Plan for Next Month” column. Based on the differences in your      spending estimate and the actual amounts from tracking spending, determine what dollar amounts you would now set for each category. If you find that you need to add new categories now that you have tracked your own actual spending, please feel free to add those.
• Indicate whether each expense category is a need or a want.

Write two or three paragraphs reflecting on the month of spending that you tracked and answer the following questions:

• What surprised you about your actual spending versus what you had estimated?
• Describe what you will or will not change for your spending plan next month and the reasons why. 
• Describe how your spending plan will help you meet your financial goals and increase your net worth (refer to the balance sheet you created in Topic 1).
• How could you use this process for your financial goals?

Tax Planning

• Review your Topic 3 Financial Portfolio submission. Provide two paragraphs on what you can do to minimize your tax liability both now and in the future (imagine life changes that may occur).

Insurance Planning (Risk Management)

• Review your submission for Financial Portfolio Project Part 5 about insurance. Submit a revised      response based on feedback you received or on new ideas you now have regarding your insurance needs. If you do not have any changes to make, include a detailed justification describing why.

Investing/Asset Planning

Investing is covered in the next topic of the course. For the purpose of this assignment, you will include a brief description of how much you know about investing. Provide two paragraphs addressing the following: 

• How would you rate your current understanding and knowledge of investing?
• How do you think investments will help you reach your financial goals?

Retirement Planning

Provide two paragraphs addressing the following points:

• What expenses will likely be higher during your retirement than now?
• What do you think are two of the barriers that keep people from saving for retirement?
• How will you overcome these barriers in your own retirement planning?

Estate Planning

Provide two paragraphs addressing the following points:

• What estate planning tools will you consider after establishing a family or career? 
• Provide at least two tools and a reason that they might meet your future plans. 

Part 2: Financial Plans and Goals

Recall your life goals as a basis for setting meaningful financial goals and accomplishing them.

In 250-500 words, address the following points:

• Provide an explanation of how you can implement your financial plans and goals. These can relate to the six main financial planning topics or include other topics, such as giving, education planning, credit, etc.
• How will you evaluate whether or not you are on track to meet your financial goals? Do you need to make any adjustments to meet your financial goals?
• Identify one thing you have learned so far in this course and how you will apply it to your life.

General Requirements

While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.

Benchmark Information

5.3: Apply sound financial principles and practices to the management of one’s personal finances.