Goals
Building Your Own FinancialPlan
1.Determine how to increase net cash flows in the nearfuture.
2.Determine how to increase net cash flows in the distantfuture.
Analysis
1.Prepare your personal cash flowstatement.
Personal Cash FlowStatement
CashInflowsThis Month
Disposable (after-tax)income$
Interest ondeposits$
Dividendpayments$
Other$
Total CashInflows$
CashOutflows
Rent/Mortgage$
CableTV$
Electricity andwater$
Telephone$
Groceries$
Health care insurance andexpenses$
Clothing$
Car expenses (insurance, maintenance, andgas)$
Recreation$
Other$
Total CashOutflows$
Net CashFlows(Total Cash Inflows minus Total CashOutflows)
Note: You must build a positive cash flow. Your income should exceed your expenses and ifnotyou must find a way to reduceexpenses.
2.Prepare your personal balancesheet.
Personal BalanceSheet
Assets
LiquidAssets
Cash$
Checkingaccount$
Savingsaccount$
Other liquidassets$
Total liquidassets$
HouseholdAssets
Home$
Car$
Furniture$
Other householdassets$
Total householdassets$
InvestmentAssets
Stocks$
Bonds$
MutualFunds$
Otherinvestments$
Total investmentassets$
RealEstate
Residence$
Vacationhome$
Other$
Total realestate$
TotalAssets
Liabilities and NetWorth
CurrentLiabilities
Loans$
Credit cardbalance$
Other currentliabilities$
Total currentliabilities$
Long-TermLiabilities
Mortgage$
Carloan$
Other long-termliabilities$
Total long-termliabilities$
TotalLiabilities$
NetWorth(Total Assets minus TotalLiabilities)$
3.Reevaluatethegoalsyouset.Basedonyourpersonalcashflowstatement,indicate how much you can save each year to reach the goals youset.
Personal FinancialGoals
DollarSavingsNumber
FinancialGoalAmountperYearof YearsShort-TermGoals
1.
2.
3.
Intermediate-TermGoals
1.
2.
3.
Long-TermGoals
1.
2.
3.
Decisions
1.Describetheactions youwilltaketoincreaseyour netcashflowsinthenearfuture.
2.Detail your plans to increase your net cash flows in the distantfuture.