Consumer Finance - Financial Plan Paper - Initial Discussion of Paper Winter 2011 Fin / Invest / Business Law Cluster Kevin C. Kaufhold 1

In General, go through the Text in a Sequential Manner Use the Text as the blueprint or outline for the paper Use worksheets, financial ratios as supporting documents Weave these documents into the text as integral parts of your paper 2

Develop YOUR OWN Financial situation & Plan Describe in WORDS and CONCEPTS --- Goals → Plans → Action Your financial goals in life Your current financial situation What action to be taken to achieve the financial goals 3

More specifically, Describe your Financial Goals Consider and discuss types of goals relevant in YOUR life p ; ST goals, LT goals As an exhibit or figure, identify goals (Worksheet 1.1) 4

Then, Describe your Financial Plans Consider and discuss planning items, p. 16 – 23; As another exhibit, Worksheet nd income (if applicable) Other special items, too Factor into the plan the business cycle (p. 29 – 31) inflation prospects in ST and LT and demographics (p. 31 – 34) 5

Next, DESCRIBE your current Financial Status Use Worksheet 2.1 Balance Sheet (p. 43) Worksheet 2.2 Income and Expense Statement (p. 48) Pie chart (p. 49) can be done in Excel from worksheet 2.2 Ratio Analysis (p. 54) Worksheet 2.3 Cash Budget by Month (p. 63) Worksheet 2.4 Budget Control Schedule 6

Then, Detail your Financial Actions How do you propose getting to the goals from your current financial position ? Develop a savings program (ch. 4, p. 129) Circulate a draft of the paper to family members for comments And to the instructor 7

Keep adding, refining, fine-tuning the draft of your financial plan Add new knowledge & ideas Info gleamed from future chapters ! And supplemental materials from instructor Add to the goals, plans, actions on a regular basis Treat the chapter items as a “wealth” of info for the paper Include relevant aspects of business law & investment chapter Include life / work experiences and knowledge Make the final paper a professional-level document Both as to quality And as to the paper’s format / overall presentation 8

After the course ends, keep the financial plan Update annually Keeps you focused on LT financial goals Yearly net worth calculations can be used to graph out your financial life cycle Can be used as the basis for a personal financial statement for business / commercial loans The plan can also evolve into an retirement / tax / estate planning document Assists in the development of tax issues, wills, and trusts A good financial plan done in college can be useful throughout your life 9

Comments ? Questions ? 10