Financial Control Instrument: Hypothetical Financial Plan

Hypothetical financial plan
Student’s Name
Institutional Affiliation
Hypothetical financial plan
A financial plan enables individuals to comprehensively evaluate their current and future financial state using the variables at hand. It is these variables that enable them to generate their future cash flows, the value of assets and withdrawal plans through prediction. In this regard, a financial plan is an important financial control instrument for anyone dealing with cash flows. The ultimate goal of a financial plan is to enable individuals to achieve their financial goals as well as meet both their current and future needs. In order for this to be effectively achieved, there is need to appropriately strategize a financial plan.
A well strategized financial plan clearly indicates the current situation by assessing the assets and expenses of an individual. It indicates the funds within the disposal of the individual as well as how they can be managed to achieve both short-term and long-term goals of the person (Bhate, 2015). However, there are challenges involved when creating financial plans. These challenges include; high tax burdens, misappropriation of funds and unforeseen situations such as theft. If not addressed appropriately, these challenges can hinder one from achieving their long-term financial goals. In response to these challenges, a financial plan needs to have recommendations which are specific and also alternative solutions. This will allow for the reorganization of funds and enable the individual to achieve their desired goals.
Personally, my long-term financial goals are to become financially independent, achieve and maintain high standards of living, and achieve more returns in my future investments. I need to effectively control my expenditures, maximize on my savings and also invest wisely so as to generate lots of wealth. This will enable me to live comfortably and secure my future, especially after retirement. I have to factor in all these goals when drafting my hypothetical financial plan so as to achieve the set objectives. Accordingly, I will keep track of my expenses, especially those which are unnecessary. This will enable me to distribute cash within my disposal appropriately and maximize savings. In order to come up with a relevant hypothetical plan, I analyzed my expenses for two months.
Below is my hypothetical financial plan:
Cash flow
Income

Annual amount

Percentage amount

Income before being taxed

$100,000

100

Income Taxes & Deductions

$19,110

19

Income after tax

$80,890

81

Expenses



Housing

$11,000

11

Auto

$9,000

9

Food

$9,000

9

Health Care

$2,150

2

Clothing

$6,250

6

Miscellaneous

$1,100

1

Entertainment

$13,800

14

Total expense

$ 51,110

51

Net income

$29,900

30

Most of my money is spent on food, clothing, a...