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Building Your Own Financial Plan

The document outlines steps for creating a personal financial plan, focusing on increasing net cash flows both in the near and distant future. It includes instructions for preparing a personal cash flow statement and balance sheet, as well as setting and reevaluating financial goals. Additionally, it emphasizes the importance of ensuring cash inflows exceed outflows and provides a framework for planning future financial actions.

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qasim.muzammil2024
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36 views6 pages

Building Your Own Financial Plan

The document outlines steps for creating a personal financial plan, focusing on increasing net cash flows both in the near and distant future. It includes instructions for preparing a personal cash flow statement and balance sheet, as well as setting and reevaluating financial goals. Additionally, it emphasizes the importance of ensuring cash inflows exceed outflows and provides a framework for planning future financial actions.

Uploaded by

qasim.muzammil2024
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Goals

Building Your Own Financial Plan


1. Determine how to increase net cash flows in the near future.
2. Determine how to increase net cash flows in the distant future.
Analysis
1. Prepare your personal cash flow statement.
Personal Cash Flow Statement
Cash Inflows This Month
Disposable (after-tax) income Interest on deposits
Dividend payments Other
Total Cash Inflows $
Cash Outflows
Rent/Mortgage Cable TV
Electricity and water Telephone Groceries
Health care insurance and expenses Clothing
Car expenses (insurance, maintenance, and gas) Recreation
Other
Total Cash Outflows $
Net Cash Flows (Total Cash Inflows minus Total Cash Outflows)
Note: You must build a positive cash flow. Your income should exceed your expenses and if not
you must find a way to reduce expenses.
2. Prepare your personal balance sheet.
Personal Balance Sheet
Assets
Liquid Assets
Cash
Checking account Savings account Other liquid assets
Total liquid assets $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Household Assets
Home Car Furniture
Other household assets
Total household assets $
Investment Assets
Stocks Bonds Mutual Funds
Other investments
Total investment assets $
Real Estate
Residence Vacation home Other
Total real estate $
Total Assets
Liabilities and Net Worth
Current Liabilities
Loans
Credit card balance Other current liabilities
Total current liabilities $
Long-Term Liabilities
Mortgage Car loan
Other long-term liabilities
Total long-term liabilities $
Total Liabilities $
Net Worth (Total Assets minus Total Liabilities) $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3. Reevaluate the goals you set. Based on your personal cash flow statement,
indicate how much you can save each year to reach the goals you set.
Personal Financial Goals
Dollar Savings Number
Financial Goal Amount per Year of Years Short-Term Goals
1
2
3
Goal 1 $
Goal 2 $
Goal 3 $
$ $
$ $
$ $
Intermediate-Term Goals
1
2
3
Goal 1 $
Goal 2 $
Goal 3 $
$ $
$ $
$ $
Long-Term Goals
1
2
3
Goal 1 $
Goal 2 $
Goal 3 $
$ $
$ $
$ $
Decisions
1. Describe the actions you will take to increase your net cash flows in the near future.
2. Detail your plans to increase your net cash flows in the distant future.
ws in the near future.
ws in the distant future.

This Month

and gas) Recreation

$
s minus Total Cash Outflows)
. Your income should exceed your expenses and if not

liquid assets
$
$

$
$
s Total Liabilities) $

n your personal cash flow statement,


ar to reach the goals you set.

Amount per Year of Years Short-Term Goals


crease your net cash flows in the near future.
ash flows in the distant future.

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