Personal Financial Plan Assignment



Personal Financial Plan Assignment

Scenario: You are a Financial Planner for Chris Kelly’s Family

Chapter 1

Task #1-1:  Develop a list of short-term, intermediate term, and long-term goals.  Estimate the dollar amount of each goal, the priority (low, medium, and high) and expected date you expect to complete each goal.

Chapter 2

Task #2-1 (Excel):  Develop a monthly and annual preliminary budget. Note: The budget will change as the semester unfolds.

Task #2-2 (Excel): Develop a personal balance sheet.

Task #2-3:  Should Chris be pleased with the preliminary budget? Balance sheet? Explain.

Hand in Task from Chapter 1 and 2 (Percentage of Class Grade: 10%)

Chapter 3

None:  However, you may want to experiment with the time value of money concepts as it relates to the plan.  That is, think how you might use the time value concepts to help you develop your goals.  I will provide more detail later in the semester.

Chapter 4

Task #4-1 (Excel):  Adjust the budget to account for an accurate estimation in social security taxes, Federal Income Taxes, and State Income Taxes.

Task #4-2:  Fill out a preliminary W-4 using the concept of "flat" withholding.

Task #4-3:  List potential steps you can implement now or in the future to reduce your income taxes.

Hand is tasks from chapter 4 (Percentage of Class Grade: 10%)

Chapter 5 and 6

Task #5/6-1:  Are you pleased with the type of Chris’ short term investments? Explain.

Task #5/6-2:  Determine an appropriate dollar value of emergency/liquid funds. Provide a rationale. 

Task #5/6-3: If there are not enough liquid funds, make a recommendation to Chris so that there are enough emergency/liquid funds.

Chapter 7

Task 7-1:  Recommend the attributes Chris should look for in a credit card.

Chapter 8

Task #8-1:  Are you pleased with Chris’ automobile loan? If not, provide a recommendation with a rationale.

Task #8-2: Develop an amortization for Chris’ automobile loan? When will it be paid off?

Task #8-3:  Are you pleased with Chris’ personal debt (excluding auto and home)? If not provide a recommendation with a rationale.

Hand in Tasks from chapters 5-8 (Percentage of Class Grade: 5%)

Chapter 9

Task #9-1:  If Chris could rent a home for $750 a month, should he? Assume the home is similar to the one he owns. Show your work.

Task #9-2:  What are the benefits to Chris of home ownership?

Task #9-3: Using an amortization schedule, how much interest expense will Chris pay with the current first mortgage.

Task #9-4: Are you pleased with Chris’ first mortgage? If not, recommend a new mortgage including terms (e.g., 30 year), interest rate, points, and amount to refinance. What would the monthly payment equal? Justify your recommendation. Assume any refinancing costs would equal $2,000.

Chapter 12

Task #12-1:  Should Chris buy life insurance? If so, how much? Justify your answer.

Task #12-2: Estimate how much the life insurance would

Task #12-3:  Determine the type of life insurance. Estimate how much the life insurance would cost.

Hand in Tasks from chapter 9 and 12. (Percentage of Class Grade: 10%)

Chapter 13-18

Task #13-18-1:  Develop the appropriate asset allocation taking into account the goals and risk tolerance. Recommend any changes to Chris’ investments (e.g., Aggressive Growth Mutual Fund) taking into account goals and risk tolerance.

Chapter 19

Task #19-1:  How much money will Chris need at retirement?

Task #19-2:  Develop a savings investment plan that will allow Chris to retire on time. This should include how much should be invested each year before retirement.

Hand in tasks from chapters 13-19. (Percentage of Class Grade: 10%)

Chapter 21:

Task 21-1: Final Changes:  There will be more adjustments to be made to the plan. These will be assigned based on classroom discussion and the other goals.

Final Plan (including final changes) (Percentage of Class Grade: 20%)

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