Personal Financial Plan Accounting, Finance, SPSS Essay

Personal Financial Plan
Student Name
Institution Affiliation
Current Situation and My Short-term, Intermediate and Long-term goals
I recently joined Rutgers to pursue a Bachelor degree program. My short-term goal is to graduate my bachelors with honors and consequently, position me better to land my dream career as a financial analyst in one of the top financial firms in the country with the likes of Goldman Sachs, JP Morgan and Citigroup being top of the list. In that regard, I am putting in extra efforts in my studies. With the few friends that I have been able to make in class, we have formed a discussion group where we meet regularly to discuss and go through course materials. I strongly believe that academic success is vital in ensuring and guiding an individual to realize their dreams and aspirations.
I have also taken steps to relieve my parents of some of the burden involved in seeing me through college. It is a known fact that college education is very expensive with tuition costs increasing annually. Furthermore, considering the high population, some students including myself have to resort for off-campus hostels and apartments since it’s impossible for all of us to get accommodation within the college premises. There are also other expenses pertaining to meals and course materials that have to be purchased to support learning. My parents usually send me $ 1500 to cater for my monthly living expenses and always encourage me to be cautious on my spending and that they won’t send me any money in between if not to cater for dire emergencies. While $1500 is a huge sum of money, the living expenses within and outside campus are quite expensive and there was a time when I was pretty new that it failed to get me halfway through the month. In that regard, I have managed to obtain a part-time job at the school’s cafeteria where I am paid $10 an hour. There are weeks that I have been able to put in a good shift at work and made quite a substantial amount of money. The job has put me in a good shape financially and also inculcated in me a saving culture. Eventually, it is my plan to start paying off my student loan and as such, not only graduate with honors but also debt free.
My intermediate goal after graduating with honors from the university 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. Through being capable of performing more than one task in my dream organization such as Goldman Sachs, I will become more marketable and the company will have to pay me handsomely to retain my services. It is estimated that an entry level financial advisor makes about $60000 annually. It is my belief that by showing my skills in handling other tasks including wealth management and insurance in addition to financial advisory I will be worth at least double the amount shared above within the first year of employment.
To achieve that objective, I intend to be proactive and offer assistance to managers in different departments. I will take the opportunity to learn the tasks done in those departments and identify ways that they can be achieved uniquely and effectively. I will also seek a role model and mentor within the organization to guide and advise me concerning my chosen career path and the best way to realize it. Nonetheless, I am not oblivious to the fact that my intermediate goals may be faced with several challenges. These include the pressures of spending and leading lavish lifestyles just like the people within my age group. I also know that some managers may not be as receptive and willing to help me learn and grow within the organization. In such a scenario, I will use the little funds set aside to enroll for online classes on different aspects in the financial sector. 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.
After about 5 years of employment, I will have acquired enough experience and saved quite a substantial amount of money to set up a financial consulting firm. I will also have interacted with various consumers who will greatly boost my business during the initial stages. It has always been my dreams to one day establish a financial firm that will assist people from all income levels to put their finances in order and consequently, lead comfortable lives. Furthermore, the majority of financial firms tend to attend to top-tier clients and discriminate low-income families. I will put in hard work to ensure the financial consulting firm prospers, grows and expands to other regions within and outside the country. With financial success guaranteed, I will marry and start a family. My wish is to provide my children with a better life and opportunities than I had. However, that does not mean that I will spoil them with a lavish style and make them irresponsible. I will also build our family home through the money saved up and as such, eliminate rental or mortgage expenses. Over time, I intend to involve my children in the family business (financial consulting firm) and also seek other business opportunities from them that we could diversity into.
Budgeting/ Savings Plan
Despite my young age, 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 who will eventually leave them broke. Parents who were keen on instilling in me a saving culture from an early age also brought me up. According to my parents, emergencies are inevitable and as such, it is prudent for individuals to save for rainy days. For instance, while my parents at the moment are capable of paying my college tuition and meeting my monthly expenses, that position may change at any time. The only way one can set aside money for such moments is through having a budget that keeps their expenditures in check. A savings plan will also be fundamental in assisting me to realize my short-term, intermediate and long-term goals. There are four distinct steps that I have incorporated and intend to embrace for the foreseeable future in developing my saving plan. To begin with, I always ensure to define what I am saving for including all the goals I purpose to achieve. According to figure 1 below, there are various items that individuals save for.
Despite the long list, it is vital not to get carried away or overwhelmed and on the contrary segment those items and ideas in terms of priority and tackle them in phases. The next step in the development of my savings plan involves the identification of the amount of money I need to save for each item. For instance, at the moment I usually strive to pay my electricity and internet expenses which amount to $250 and $300 dollars respectively. Based on those two expenses, I have created my savings plan as per figure 2 below. I have also added the due date on the savings plan for when the expenses have to be paid or the services are cut off. As such, I know that every month I have to ensure I work extra hard to save up at least $550 to meet those two expenses.
The next step in my saving plan usually involves identifying how much I need to save each day to meet my overall goal. As I shared previously, I get paid $10 an hour from working the school cafeteria. However, with the busy school schedule, I usually manage to work about 4 hours daily and 5 days a week which means that my average weekly pay is $200. I am paid weekly which means I have four paydays to save and meet the two above expenses. With that in mind, I always ensure that out of the $200 I am paid weekly that I set aside $137.5 to cater for electricity and internet expenses. Lastly, in the development of my savings plan I have embraced online banking platforms that ensure that the $137.5 is deducted automatically.
Banking Plan
Based on the above facts, it is evident that my financial plan involves a lot of saving in order to achieve certain goals and objectives. In that regard, it is vital to also have an effective plan. There are various factors that I will put into consideration when choosing the most convenient bank. To begin with, I will be keen on selecting a bank that will cater to all my needs. This is to mean that I need a bank that will serve both my current and savings requirements. For instance, I currently operate saving and current accounts at the same bank. While my weekly payments are channeled through the current account, I have created a standing order that sees a certain amount that I set aside go to the saving account and at no extra costs. Secondly, I also need a bank that offers me the best interest rate on my savings in the market. The logic is to have my savings increase over time. It is also highly recommended to identify and engage with a bank that provides fixed services that will prevent me from falling into any temptations that will make use my savings for other reasons other than the stipulated objectives (Lee & Marlowe, 2003). On the same breadth, I will seek for a banking platform without minimum balance and unnecessary charges that will “eat up” my savings. Figure 4 below provides a comparison of different banks in the US based on their interest rates on savings and the minimum balance. Based on the facts shared, I would be inclined to choose HSBC Direct Savings since it offers 2.3% interest rates and requires $1 minimum balance. Last but not least, I would also look to engage with a bank that offers online services. With the digital and internet age, I want a bank that conveniently and easily allows me to manage my account without the need of visiting banking halls to complete transactions. I also want a bank that allows me to keep track of my expenditure and savings through my phone and the convenience of my home. Nonetheless, considering that online transactions are prone and susceptible to fraud, I will be keen on interacting with a bank that has put in place effective security measures and has not been implicated in any fraudulent incidents over the recent past.
Taxes
I am cognizant to the fact that taxes are important and they help the government to provide essential services, public goods and improve infrastructure in the country. I also know that tax is charged on different items including savings and income and that it is illegal to avoid paying...