Personal Financial Plan Outline. Accounting, Finance, SPSS Coursework

Student Name
Course
Instructor
Date
Personal Financial Plan Outline
Introduction
I firmly believe that it is through the grace of God that I am where I am today because my life has been full of obstacles and challenges. I was brought up in a family where having more than two meals a day was a luxury and going to bed on an empty stomach was quite normal. While my father worked tirelessly to put food on the table and take good care of us his job at a local timber factory wasn’t sufficient to cater for all our family needs. As such, my mother stepped up to the plate and worked a few hours in the evening doing laundry at one of the hospitals in town. My parents were keen on giving us quality education which they believed would help change our fortunes and in this regard, ensured that my two brothers and I never missed school. I am the oldest and they would occasionally sit me down and sensitize to me on the importance of never giving up despite issues cast upon us. They also enlightened me on the philosophy that more money translated to more problems and it has been my mantra ever since. My parents urged me not to lose myself in riches and amassing wealth at the expense of not only health but also companionship of loved ones and friends. They also advised that with a proper saving and investment plan one can live a better life than those with millions and billions of dollars in their accounts. I purpose to use the philosophy shared by my parents throughout my life and consequently mold into a responsible and respectable member in society. That as it may, my biggest financial challenge currently pertains to the payment of my college tuition among other expenses. Although my student loan has helped in that regard, I know for a fact that my parents are straining to put me through college and it is as a result that I have taken up a part-time job at a local diner to meet my living expenses. While the initiative is financially-beneficial, it impedes me from studying effectively at the institution.
Personal Financial Goals
Short-Term Goals: I purpose to accomplish or achieve my short-term goals within the next three years. Based on this fact, my first short-term objective is to complete my college education satisfactorily and graduate with honors. I know for a fact that for me to land a position in one of the leading financial firms in the region it is imperative that I am impeccable academically and have the requisite certificates that reflect that position. By graduating with first class honors I will be better positioned to be selected for an entry level position in companies such as Goldman Sachs and JP Morgan. As such, to accomplish the goal I purpose to put in extra effort in my studies and work tirelessly to have outstanding grades. My second short-term goal is to get a part-time job that pays better than what I currently have. I reside at an off-campus hostel that is quite costly in terms of rent. There are also other expenses such as meals and purchasing of some course materials that my current job doesn’t fully meet. A better-paying job will make me a bit financially-independent and consequently, alleviate some of the strain off my parents. To achieve my second short-term goal, I will frequent job boards and notices within and outside the school. I will also check around the local businesses for open positions. I will also inquire from friends and classmates on organizations that are hiring in the area.
Intermediate Goals: I will embark on accomplishing my medium goals within four to five years after graduating from the university. My first medium goal is to work for a few years, say five, as a financial analyst in one of those financial firms shared above and save as much money as possible to meet my long term goals. I will use that time to gain experience and learn all the core aspects of financial services including banking, advisory, wealth management, mutual funds and insurance among others. I strongly believe that in the current competitive employment environment, it is vital that one is all-rounded and therefore, capable of attending to more than one duty in an organization. Individuals who are vastly knowledgeable and experienced in their roles are not only marketable but are usually paid handsomely for their services. I will take various steps to achieve this goal. I will be proactive and will be ready to offer assistance to managers in and around the organization. I will use the opportunities to learn more on the duties in different departments and overall what it takes to run successful financial consulting enterprises. I will also further my knowledge my enrolling in various online classes on diverse financial sectors. The additional knowledge combined with the duties I will be performing will still manage to transform me into an all-rounded employee. Once I am marketable enough and start earning huge sums of money, I will ensure to keep my expenditures at a minimum. I purport to save as much as possible and invest in plans that promise me great returns.
My second intermediate goal is to clear or pay a substantial chunk of my student loan within that period. Although the funds are vital and assist individuals from poor backgrounds such as myself, I also understand that student loans can significantly jeopardize one’s future aspirations and dreams. Late payments on student loans also tend to lower an individual’s credit score and limit their chances of getting some financial benefits. Currently, organizations are also performing credit checks on candidates and as such, it may impede my chances of getting employed in the top financial firms in the country. Overall, I also want to live a debt-free life and clearance of my student loan will be significant step in the right direction. To achieve this goal, I will take the initiative to the repayment modalities including the interest rate on the loan. With this information, I will then budget effectively on repaying it. I will put in monthly standing orders to ensure it is deducted. I will also make one-off payments whenever I receive bonuses.
Long-term Goals: My first long-term goal is to eventually open up a financial consulting firm that will provide diversified services for individuals of all calibers. I purpose to embark on this goal after working for several years and consequently, will not only have acquired the necessary and requisite experience to run such an enterprise but will also have the finances to meet the different expenditures. Based on my background, it has been my dream to open up a financial firm that will help poor people make sound and reasonable financial decisions. As is currently the case, financial institutions are more inclined on assisting high income individuals as opposed to their counterparts on the other end of the spectrum. To achieve this objective, I will put in hard work and determination to grow the financial firm and eventually expand it to other regions within and outside the US. I will seek to hire like-minded individuals and together strategize on effective ways of achieving stipulated objectives.
My second long-term goal is to retire by the age of 55 years. I project that by that time the financial firm will have reached greater heights. I will also have groomed able successors to take over the mantle. I firmly believe that individuals should not dedicate their entire lives to their work and that it should reach a time when they look after themselves. During my retirement, I intend to tour the globe and enjoy the different pleasures that life has to offer. My dream destination is Maldives and it is my belief that I will visit the region with my wife. Through the investments I will have made while I working, I believe I will have enough funds put aside for my travel and other needs. To realize this long-term goal, I will make smart decisions at my financial firm. I will also diversify my investments in other areas including money markets and real estate.
Financial Information
My personal financial statements are as shown in figures 1 and 2 below. From the figures, I have a negative net worth and am operating on a deficit in terms of my income and expenditure.
Management of Raises: I firmly believe that sound financial planning is crucial to leading a successful and comfortable life (Asch, and Kaye 36). With that said, it is imperative to take note of one’s incomes and expenditures. One form of income that individuals usually get albeit not frequently is a raise. My current job at the local diner pays $10 an hour. During end of month weekends, the management of the establishment usually increases the pay to $15 an hour because of increased foot flow. The $5 increment may seem minimal but makes a whole lot of difference to my finances. I remember last September I managed to make about $300 after working on Saturday and Sunday. Ideally, on a normal weekend working the same hours I would have made half that amount. Considering the fact that the management has made it clear on the change of pay during end month weekends, I have taken steps to manage the raises and in so doing, avoid them from being absorbed into my savings. During such periods, I usually put aside the raise in a locked savings account. I am not eligible to withdraw the funds from the account before 5 years have lapsed and as such, use it to save for my future aspirations such as assisting to clear my student loans. I have made arrangements with the accountant at the diner to ensure the funds are wired directly to the account. The initiative limits me from harboring second thoughts.
Budget: I am cognizant to the fact that it is essential for one to plan adequately concerning their finances because money is never enough. For one, the cost of living is continuously rising and with it the prices of various goods and services. Similarly, without a financial plan or rather a budget, one is exposed to overspending and becoming a spendthrift which will eventually leave them broke (Asch, and Kaye 40). I fully understand that it is important for an individual to make a budget based on their income and expenses since what works for others may not work for them. In this regard, I purpose to use the following procedure to determine my budget. I will calculate my expenses through checking my banking statements, mobile transactions, receipts and other financial files. I will then expenses for a period of 6 months and then divided by that period to get my monthly expenditure. I will then add 10 to 15% to the figure obtained to cater for any unplanned expenses. Secondly, I will determine my actual income which will include not only my salary but also any extra funds received such as raises. Thirdly, I will determine my savings and debt payoff goals by getting the difference of my income and expenses. In so doing, I will save the overage of use it to pay debt. In the case of a shortfall, I will find ways to cut my expenses or find ways to supplement my income. Lastly, I will continuously stay on top of my budget by ensuring regular recording of my expenses and making adjustments where applicable. Figure 2 below provides a summary of my monthly budget. It shows my monthly income against expenditures.
Spending Issues: Based on my tough financial background and the sound principles and philosophies about money instilled in me by parents, I can confidently share that I don’t harbor any spending issues. My only challenge is that the amount of wages I am currently earning is insufficient to meet my living expenses at the university. I can only put in at maximum 4 hours daily which totals to $40 daily and about $1200 monthly. I pay $800 monthly as rent which leaves me with a little over $300 for meals and other expenses. As such, it is vital that I find a job that pays at least double what I currently earn since it is impossible to put in more hours due to school commitments.
Debt Analysis: Debts are obligations that in some cases have stringent repayment terms and conditions. That as it may, I fully understand that debts such as student loans are vital in assisting the disadvantaged in society to complete their education. One notable way that individuals fall into debt is through the acquisition of credit cards. These debt instruments allow cardholders to pay for goods and services from merchants based on agreements made with card issuers that they would pay off the amounts and interest within a stipulated time frame. Credit cards are quite common since they provide convenience and enhance security (Forbes et al. 204). Despite...