Requirements for the Personal Financial Plan Format o Upload a single PDF document to Canvas Include a cover page with your name, course number and section, date o 1" margins on all sides; 12pt Arial font Use headers for each section to ensure all parts of the paper are included Use footnotes and a reference page at the end of the paper to document your sources There is no set length required for the paper; just ensure all sections are included in your final submission Section - Personal information o In paragraph form, discuss your major, expected graduation date and career plans If you already have a job offer, use your future salary as the starting point for your budget If you do not have a job offer yet, research what an appropriate entry-level salary would be for your major and skillset. Common sources include Salary.com, Glassdoor.com, etc. Choose a conservative figure to start to ensure you don't overstate your income. Discuss where you will live (city, state), the cost of living in that area, and whether or not you will be sharing your expenses with roommates, a partner or spouse or if you will be moving back home to live with family. Research any major impacts on your budget such as transportation (buying or leasing a car, parking or using mass transportation), utilities, entertainment, etc. Section II - Assess your current financial situation Create a personal balance sheet that reflects your estimated net worth when you graduate Use Exhibit 3-3 on page 91 as a guide (shown below): Copyright McGraw-Hill Education Permission required for reproduction or display Rose and Edgar Game Personal Balance Sheet as of October 31, 2019 Checking account balance (Chap Sanguisoney Market Assets Chap 5 $1450 5235 3005 8000 $ 10,370 $300 5.000 200 Home computer 1400 3300 120100 36.790 38672 125204 Medical I Charge cand balances Chap 6.7) 3340 1750 Chap 47 Page 1 of 4 9000 1760 1200 $1.240 1555240 Requirements for the Personal Financial Plan Remember to use the cash value you would receive if you had to sell your assets in their current condition, not what you originally paid for them Only include assets you own yourself, not property that belongs to someone else (like your parent's house or car) If you do own a home, include the outstanding mortgage balance in the liabilities section If you own a car but haven't paid for it in full yet, include the remaining balance of the car loan in the long-term liabilities section. Use sites like KBB.com to find the market value of your car. Student loans should be listed in the long-term liabilities section Include a separate paragraph after the balance sheet has been created that discloses the terms of the loans (amounts of each loan, maturity, interest rate, monthly payment). If you have more than one type of loan, list them individually. Calculate your net worth by subtracting your total liabilities from your total assets and comment on where you stand. You can either create a table in Word or use Excel and then copy/paste the balance sheet into your financial plan Section III - Create a monthly cash flow statement of income and outflows o Use Exhibit 3-4 on page 94 to create a monthly cash flow statement (shown below) Begin with your gross salary and then deduct any federal, state and local taxes, as well as social security Research the costs for your fixed and variable expenses based on the living situation you described in section I of the paper The items listed in the exhibit are a starting point; you may have more or less than those in the example so adjust accordingly Calculate your monthly cash surplus (or deficit) Divide the cash surplus across your financial goals Copyright McDraw-Hill Education. Person required for reproduction or display TAME Cash Flow Statement for the Month Ended September 30, 2019 Page 2 of 4 9.250 Requirements for the Personal Financial Plan Section IV - Set financial goals o Following the SMART approach (pages 14 & 98), establish your short-term, intermediate and long-term financial goals Each goal should be measurable and supported by the cash surplus remaining from the monthly cash flow statement Section V- Financial Ratios o Calculate the following ratios using your financial data and interpret the results: Debt ratio . Current ratio Liquidity ratio Debt-payments ratio Savings ratio Use the table on page 96 as a guide If you do not have any liabilities, enter "N/A" Section VI - Estimated monthly budget based on your expected salary Using the total income figure you calculated in the monthly cash flow statement in section III, create a monthly budget to cover all of your living expenses. Copyright McGraw-Hill Education Permission required for reproduction or display Financial goals: Increase emergency farel, avaid one 400 : o Use Exhibit 3-7 on page 99 in the textbook as a guide. o Divide each line by your take-home pay to calculate the percentage each line item represents to your total budget o Interpret your allocations compared to the guidelines listed in Exhibit 3-8 (page 101) 15-35 10-18 12-16 15-20 10-18 8-12 6-12 10 10-30 24 34 " 24 54 54 +7 5-0 56 3 0-10 +-15 5-10 54 2-4 5-5 Page 3 of 4 Requirements for the Personal Financial Plan Section VII - Review your credit report and comment on your findings Go to annualcreditreport.com and request a copy of your free credit report from one of the three main credit bureaus: Experian, Equifax or Transunion Do not include your credit report in the plan! o Comment on the information that you found, whether everything is correct or if there were entries you were not aware of previously. Section VIII - Conclusion Complete your financial plan by summarizing what you learned and the steps you will take to put the plan into action