Economics of Personal Finance
Personal Financial Plan Format
Description: The personal financial plan is comprehensive written report that provides a roadmap to financial security. If you or your client has no money now, please plan how money will be obtained and will grow over time.
I. Cover Page
II. Table of Contents
III. Part 1: Foundation of the Plan
This will include your overall financial philosophy and S.M.A.R.T. goals. You will provide information where you or your “client” is now, and where they want to be in the future. This is the roadmap for obtaining, spending, saving, borrowing, investing, managing risk, retirement, and estate planning. You will set the stage for the later sections of the report. This is where you include the Personal Planning data, such as balance
IV. Part 2: Managing Assets This will be a discussion on managing what you or your client owns. What is the plan for saving money? How will you use financial services institutions? How will excessive spending be controlled? What is the plan to grow assets in the future? Please consider tax implications in the options. You will need appropriate worksheets that support this.
V. Part 3: Managing Liabilities This will be a discussion on managing what you owe. What is your plan to reduce liabilities to minimal and manageable levels? You will discuss how you will effectively build and manage credit (credit card, loans, etc.) to enhance financial security. Please consider tax implication in the options. You will need the appropriate worksheets that support this.
VI. Part 4: Managing Risk This will be a discussion on your strategy to address a wide range of insurance needs. What types of insurance and how much is needed now, and in the future. How are you effectively planning for potential situations where insurance may be needed? You will need the appropriate worksheets that support this. VII. Part 5. Investment Strategy
This will be a discussion of your investment strategy. What is the risk level that you or your client is willing to take on? How does this affect the investment strategy? What investments will you obtain, and in what proportion, and what is your plan to rebalance your investment portfolio to build wealth overtime and ensure financial security. This where you consider a wide variety of options: stocks, bonds, mutual funds, property, real estate, etc., that will meet your financial needs. Please refer to the article that I sent in an earlier announcement. Please consider tax implications with the options selected. You will need the appropriate worksheets that support this.
VIII. Part 6: Retirement and Estate Planning This is your plan to live well when you no longer want or are able to work. This section should be a thoughtful roadmap to how you plan on to save and invest overtime to ensure your long-term financial security while you are alive. Also, in this section will be an outline of your plan to pass on your estate to others after death. Please remember there are many options available to do this. Please consider tax implications when considering options. You will need the appropriate worksheets that support this.
IX. References Research and sources cited in your plan.
X. Appendices This is where you will attach the Personal Financial Planning Worksheets Note: The personal financial plan is comprehensive written report that provides a roadmap to financial security. If you or your client has no money now, please plan how money will be obtained and will grow over time. This report will follow the financial planning process. You must: 1. Determine the current situation, 2. Develop financial goals, 3. Identify alternative courses of action, 4. Evaluate alternatives, based on your risk level, life situation, personal values, etc. 5. Create and implement the financial action plan, 6. Review and revise the financial plan. Good luck with the plans. I am looking forward to reading them.
Financial Planning Process
1. Determine Current Situation
2. Develop S.M.A.R.T.
3. Idendity Alternative
Courses of Action
4. Evaluate Alternative courses of actions, based on life situation, personal
5. Create and Implement
6. Review and Revise Plan