Assignment overview: Estimated Cash Flow Statement (aka Budget or Spending Plan) Assignment sections: - Numeric: Estimated Cash Flow Statement - Narrative: Responses to Questions 1-4 Expectation: Can you apply what we learn in this class to your very own and unique financial situation? It is expected that you be able to create a financial plan. Sometimes you will have to stretch, as some of you do not have complete control over your finances, but we can make this work. Purpose: The most powerful aspect of this course is that it has the power to impact your financial situation immediately. This project is meant to help you bridge that gap. Course resources: - Chapter 2 - Example: Page 36 - Format example: Worksheets at the end of Chapter 2: Personal Cash Flow Statement - Formats available under Module 2 Resource tab or you may customize a spreadsheet. Format options: - Spreadsheet with clear categories/descriptions, accurate math Estimated Cash Flow instructions: - Put your name at the top of each page or worksheet. Include your last name in your saved file name. Example: Cash Flow Strother (Tip: use an underscore instead of a dash between title and name) - Create an estimated 1 month cash flow statement for 2021 First, we are going to ESTIMATE expenses for the month of February. We then will track our actual cash inflows and outflows to compare to these estimates and complete another assignment. The tracking should through the month of February. - Cash inflows may include earned income, cash transfers to you, cash gifts, cash transfers from savings or loan distributions. - Cash outflows may include transfer to savings, purchases, bills, debt repayment, gifts, charitable giving, - Subtotal cash inflows and cash outflows. Calculate net result at the bottom. - If you are currently using a program for budgeting and have a way to print out the September budget, you may submit that document as long as it covers the requirements. You may not be accounting for income as I requested (for savings, loans, parent transfers for monthly spending)... so be sure you adjust that or transfer your program information to a format that is suitable for this assignment. Questions 1-4: Required responses instructions: - You may put them in cells (one for each question) below your Cash Flow Statement if you know how to wrap the text and merge cells so it can be viewed easily on the computer monitor. - Option: If you use Word, submit as a second document when you upload the cash flow statement. - Number your answers to correspond to each question number. In Word, please put a space between each paragraph for ease in reading. Answer the three questions below: 1. What was your reaction to your net number at the bottom of your cash flow statement? Net positive or negative cash flow. Was this a surprise? 2. If someone mentioned a "personal budget" on January 1 to you, what would have been your honest reaction about what a budget is and why you should do it? 3. Budget is the dreaded "B-word" in personal finance for many people wanting better money management skills. Why do you think the word "budget" can be a negative word to some people or to you? 4. What is another name you can give your monthly personal budgeting efforts each month? State your name and reasons why. - Think about what title would describe your purpose, your use, your goals. - Think about a positive, exciting, motivating name! (Cash Flow Statement is taken folks!) - Does not have to be something that is officially used in personal finance, but should be descriptive of your budget process and/or statement. If something you are borrowing from someone or someplace else, explain why you picked that same name to use. - You should try to accurately estimate your income, spending, and saving activities for the month. Remember to include any travel expenses for the holiday break. - You should customize inflow descriptions and outflow descriptions for your situation. - Think about all of your usual forms of financial support and routine expenses. o If you benefit from an expense but someone else routinely covers the expense (cell phone bill, car insurance, etc.), you should include the benefit as an income item (e.g., Bills paid by Parent as an example income category with a total of all bills paid by that individual; Cell phone (paid by parent) would be an example expense category.) o Expense categories should include the general items plus anything specific to you. You may have a pet or hobby with routine expenses. - Transfers to savings accounts are cash outflows. You will account for the savings asset (balance) in another assignment. - You may have net negative cash flow. - All information submitted is confidential. - Student loans: If you use proceeds from student loans received earlier in the semester to cover expenses in October, use the amount that you consider "available" to you for the month of October (but do not include what you need for November, etc). This is 'not' the same as the balance of your checking account. Example: You have $2,000 extra from your Fall student loans - but you know that only $400 is available to spend per month to make it to the next distribution for spring or your job over winter break. Assignment overview: Estimated Cash Flow Statement (aka Budget or Spending Plan) Assignment sections: - Numeric: Estimated Cash Flow Statement - Narrative: Responses to Questions 1-4 Expectation: Can you apply what we learn in this class to your very own and unique financial situation? It is expected that you be able to create a financial plan. Sometimes you will have to stretch, as some of you do not have complete control over your finances, but we can make this work. Purpose: The most powerful aspect of this course is that it has the power to impact your financial situation immediately. This project is meant to help you bridge that gap. Course resources: - Chapter 2 - Example: Page 36 - Format example: Worksheets at the end of Chapter 2: Personal Cash Flow Statement - Formats available under Module 2 Resource tab or you may customize a spreadsheet. Format options: - Spreadsheet with clear categories/descriptions, accurate math Estimated Cash Flow instructions: - Put your name at the top of each page or worksheet. Include your last name in your saved file name. Example: Cash Flow Strother (Tip: use an underscore instead of a dash between title and name) - Create an estimated 1 month cash flow statement for 2021 First, we are going to ESTIMATE expenses for the month of February. We then will track our actual cash inflows and outflows to compare to these estimates and complete another assignment. The tracking should through the month of February. - Cash inflows may include earned income, cash transfers to you, cash gifts, cash transfers from savings or loan distributions. - Cash outflows may include transfer to savings, purchases, bills, debt repayment, gifts, charitable giving, - Subtotal cash inflows and cash outflows. Calculate net result at the bottom. - If you are currently using a program for budgeting and have a way to print out the September budget, you may submit that document as long as it covers the requirements. You may not be accounting for income as I requested (for savings, loans, parent transfers for monthly spending)... so be sure you adjust that or transfer your program information to a format that is suitable for this assignment. Questions 1-4: Required responses instructions: - You may put them in cells (one for each question) below your Cash Flow Statement if you know how to wrap the text and merge cells so it can be viewed easily on the computer monitor. - Option: If you use Word, submit as a second document when you upload the cash flow statement. - Number your answers to correspond to each question number. In Word, please put a space between each paragraph for ease in reading. Answer the three questions below: 1. What was your reaction to your net number at the bottom of your cash flow statement? Net positive or negative cash flow. Was this a surprise? 2. If someone mentioned a "personal budget" on January 1 to you, what would have been your honest reaction about what a budget is and why you should do it? 3. Budget is the dreaded "B-word" in personal finance for many people wanting better money management skills. Why do you think the word "budget" can be a negative word to some people or to you? 4. What is another name you can give your monthly personal budgeting efforts each month? State your name and reasons why. - Think about what title would describe your purpose, your use, your goals. - Think about a positive, exciting, motivating name! (Cash Flow Statement is taken folks!) - Does not have to be something that is officially used in personal finance, but should be descriptive of your budget process and/or statement. If something you are borrowing from someone or someplace else, explain why you picked that same name to use. - You should try to accurately estimate your income, spending, and saving activities for the month. Remember to include any travel expenses for the holiday break. - You should customize inflow descriptions and outflow descriptions for your situation. - Think about all of your usual forms of financial support and routine expenses. o If you benefit from an expense but someone else routinely covers the expense (cell phone bill, car insurance, etc.), you should include the benefit as an income item (e.g., Bills paid by Parent as an example income category with a total of all bills paid by that individual; Cell phone (paid by parent) would be an example expense category.) o Expense categories should include the general items plus anything specific to you. You may have a pet or hobby with routine expenses. - Transfers to savings accounts are cash outflows. You will account for the savings asset (balance) in another assignment. - You may have net negative cash flow. - All information submitted is confidential. - Student loans: If you use proceeds from student loans received earlier in the semester to cover expenses in October, use the amount that you consider "available" to you for the month of October (but do not include what you need for November, etc). This is 'not' the same as the balance of your checking account. Example: You have $2,000 extra from your Fall student loans - but you know that only $400 is available to spend per month to make it to the next distribution for spring or your job over winter break