Benefits of Personal Financial Plan:
• It assists your current financial picture, cash flows, income taxes and investments.
• Optimizes cash flows to achieve maximum potential.
• It matches with your financial goals.
• It brings financial empowerment and intelligence.
• Brings clear and sensible roadmap to financial independence.
• Let you measure and track investment performance and goal attainment.
• Improves communication around the money with spouse or partner.
Key components of successful financial Plan:
• Assessment: It compiles simplified version of personal financial statements like B/S and I/S which may include personal assets like car and house etc.
• Goal Setting: it includes all short and long term goals set by an individual for future like saving and fund for after retirement life.
• Adequate Protection: In this part a person invests money for future like insurance etc for risky situations like death, disability and health care etc.
• Tax planning: Tax is one of the largest expenses of household, they decide how much will we pay and when?
• Savings and retirement goals: it focuses on long or short term saving for purchases or for starting any business after retirement.
• Plan creation: How to accomplish goals like reducing unnecessary expenses and increase net income.
• Execution: Formally execute the plan with required discipline and perseverance.
• Monitoring and Reassessment: With the passage of time, financial plan is monitored for possible reassessments of adjustment with due course of time.
Definitions of General and Specific Goals:
Are realistic, have specific dollar amount, Specific time frame, indicate the type of action to be taken to achieve it, and are measurable.
... middle of paper ...
...edit card balance 1500 61.8
Other current liabilities 160 6.59
Total current liabilities 1837 75.6
Mortgage 200 8.24
Car loan 0 0
Other long-term liabilities 390 16.00
Total long-term liabilities 590 24.30
Total Liabilities 2427 100
Net Worth 650
Total Liabilities and Net Worth 3077
Personal Income Statement
For Month Ending July 31, 2013
Disposable (after-tax) income 1000 34.63
Interest on deposits 0 0
Dividend payments 0 0
Scholarships and Grants 1887 65.36
Other 0 0
Rent/Mortgage 830 30.79
Car loan payment 0 0
Cable TV 40 1.48
Insurance premiums 130 4.82
Electricity and water 120 4.45
Telephone 75 2.78
Groceries 500 18.55
Clothing 150 5.56
Car expenses 250 9.27
Recreation 350 12.98
Other 250 9.27
Net Income $192
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