$=$PFI $2301$: Personal Financial Literacy LG$3$ Project

LG$3-$Understand how financial statements & ratios and basic tax fundamentals impact the financial planning process.

LG$3-$Q$1$ Application Time $-$ Use the information below to create the Income & Expense Statement

Income and Expenses are given in annual amounts

Jessica Age $34$

Annual Value

Salary $$60,000\mathrm{.}00$

Mortgage Payments $$22,000\mathrm{.}00$

Money Market Account $$15,000\mathrm{.}00$

Mutual Fund Account $$1,000\mathrm{.}00$

Home Value $$160,000\mathrm{.}00$

Furniture Value $$2,300\mathrm{.}00$

Mortgage Balance $$138,000\mathrm{.}00$

Roth IRA $$8,500\mathrm{.}00$

Credit Card Consolidation Loan Payment $$600\mathrm{.}00$

Entertainment $$1,200\mathrm{.}00$

Checking Account $$22,000\mathrm{.}00$

Car Payments $$5,100\mathrm{.}00$

Consulting Income $$2,000\mathrm{.}00$

Car Loan Balance $$4,000\mathrm{.}00$

Groceries $$2,400\mathrm{.}00$

Fuel $$1,000\mathrm{.}00$

Car $$8,000\mathrm{.}00$

Employer Plan $$10,000\mathrm{.}00$

Student Loan Payment $$6,000\mathrm{.}00$

Stamp Collection $$500\mathrm{.}00$

Credit Card Balance $$1,000\mathrm{.}00$

Amazon Purchases $$2,500\mathrm{.}00$

Savings Account $$5,000\mathrm{.}00$

Past$-$Due Speeding Ticket $$350\mathrm{.}00$

Student Loan Balance $$20,000\mathrm{.}00$

Insurance $$3,000\mathrm{.}00$

Utilities $$2,300\mathrm{.}00$

Annual Savings $$2,500\mathrm{.}00$

CASH INFLOWS

Income Annual Monthly

salary $$60,000\mathrm{.}00$ $$5,000\mathrm{.}00$

Consulting Income $$2,000\mathrm{.}00$ $$166\mathrm{.}67$

TOTAL CASH INFLOWS $$62,000\mathrm{.}00$ $$5,166\mathrm{.}67$

CASH OUTFLOWS

Fixed Expenses

mortgage payments $$22,000\mathrm{.}00$ $$1,833\mathrm{.}33$

cc $$600\mathrm{.}00$

car $$5,100\mathrm{.}00$

student loan $$6,000\mathrm{.}00$

insurance $$3,000\mathrm{.}00$

util $$2,300\mathrm{.}00$

Total Fixed Expenses $$3,900\mathrm{.}00$

Variable Expenses

enter $1200$

groc

fuel

ama

annual savings

Total Variable Expenses $9600$

TOTAL CASH OUTFLOWS

NET DISCRETIONARY CASH FLOW

LG$3-$Q$2$ Application Time $-$ Jessica's Balance Sheet

December $31$

ASSETS

Monetary

Total Monetary

Investment

Total Investment

Household$/$Personal Property

Total Household

Retirement Accounts

Total Retirement

TOTAL ASSETS

LIABILITIES & NET WORTH

Short$-$Term

Total Short$-$Term

Long$-$Term

Total Long$-$Term

TOTAL LIABILITIES

TOTAL NET WORTH

LG$3-$Q$3$ Application Time $-$ Ratios

Ratio Answer

Month's Living Expenses Covered #N$/$A

Debt #N$/$A

Long Term Debt Coverage #N$/$A

Savings #N$/$A

Investment Assets to Total Assets $($total investments$/$total assets$)$ #N$/$A

LG$3-$Q$4$ Application Time $-$ Analysis

How well is Jessica managing her finances? Provide two examples from the financial statements and ratios.

What areas can Jessica improve on with her finances? Provide two examples from the financial statements and ratios.

Identify one tax related concept that would be helpful for Jessica to know?