Benchmark – Personal Finance Plan

Assessment Description

The purpose of this assignment is to provide you the opportunity to apply sound financial principles and practices to the management of your current and future personal finances.

Part 1: Six Topics of Financial Planning

There are six major components of a financial plan. These include:

  1. Financial (Cash Flow) Management
  2. Tax Planning
  3. Insurance Planning (Risk      Management)
  4. Investing/Asset Planning
  5. Retirement Planning
  6. Estate Planning

For Part 1 of this assignment, you will complete the following pieces of your own personal financial plan.

Financial (Cash Flow) Management

  • You will need your original cash flow estimate that you created in Topic 1 and your “Daily Spending Log,” in which you worked on tracking your expenses for one month. Create a spreadsheet that lists the various expense categories in one column, the dollar amounts of your original estimates of your monthly expenses in the next, and then shows your actual expenses that you tracked in your spending log in the next column. Note: Your actual expenses in many categories will likely be quite different from your original estimates. There is no need to have spent what you predicted. In fact, much awareness can come from the areas in which your estimates where different from your actual spending.
  • Next, add a “Spending Plan for Next Month” column. Based on the differences in your      spending estimate and the actual amounts from tracking spending, determine what dollar amounts you would now set for each category. If you find that you need to add new categories now that you have tracked your own actual spending, please feel free to add those.
  • Indicate whether each expense category is a need or a want.

Write two or three paragraphs reflecting on the month of spending that you tracked and answer the following questions:

  • What surprised you about your actual spending versus what you had estimated?
  • Describe what you will or will not change for your spending plan next month and the reasons why. 
  • Describe how your spending plan will help you meet your financial goals and increase your net worth (refer to the balance sheet you created in Topic 1).
  • How could you use this process for your financial goals?

Tax Planning

  • Review your Topic 3 Financial Portfolio submission. Provide two paragraphs on what you can do to minimize your tax liability both now and in the future (imagine life changes that may occur).

Insurance Planning (Risk Management)

  • Review your submission for Financial Portfolio Project Part 5 about insurance. Submit a revised      response based on feedback you received or on new ideas you now have regarding your insurance needs. If you do not have any changes to make, include a detailed justification describing why.

Investing/Asset Planning

Investing is covered in the next topic of the course. For the purpose of this assignment, you will include a brief description of how much you know about investing. Provide two paragraphs addressing the following: 

  • How would you rate your current understanding and knowledge of investing?
  • How do you think investments will help you reach your financial goals?

Retirement Planning

Provide two paragraphs addressing the following points:

  • What expenses will likely be higher during your retirement than now?
  • What do you think are two of the barriers that keep people from saving for retirement?
  • How will you overcome these barriers in your own retirement planning?

Estate Planning

Provide two paragraphs addressing the following points:

  • What estate planning tools will you consider after establishing a family or career? 
  • Provide at least two tools and a reason that they might meet your future plans. 

Part 2: Financial Plans and Goals

Recall your life goals as a basis for setting meaningful financial goals and accomplishing them.

In 250-500 words, address the following points:

  • Provide an explanation of how you can implement your financial plans and goals. These can relate to the six main financial planning topics or include other topics, such as giving, education planning, credit, etc.
  • How will you evaluate whether or not you are on track to meet your financial goals? Do you need to make any adjustments to meet your financial goals?
  • Identify one thing you have learned so far in this course and how you will apply it to your life.

General Requirements

While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.

Benchmark Information

5.3: Apply sound financial principles and practices to the management of one’s personal finances.

FINANCIAL PORTFOLIO PROJECT-4 2

Financial Portfolio Project: Part 4

FIN-210-Personal Finance Grand Canyon University August 9, 2022.

Determining and Tracking Credit Score & Description of why it is Important to Maintain Good Credit.

To monitor your credit score you may contact the credit bureaus and request your score. There are also numerous companies that provide credit reports (Marston, 2019). Your credit score is essentially your financial future. The easier and less expensive it will be to obtain loans, the better you will be at managing your credit. Even if you decide against taking out loans, keeping an eye on your credit report may enable you to spot fraud and identity theft before it’s too late and spare you years of ruinous debt.

Interest Rate for a Vehicle Loan with a 600-Credit Score. Interest on a 750-Credit Score.

The average interest rate for a new car loan with a credit score of 600 to 609 is 6.70%. For a 750-credit score, the average auto loan rate is about 3.48 percent for new cars and 5.49 percent for used cars

Calculation of the total price of a $25,000.00 automobile, financed for 5 years, based on the two different interest rates without any trade-in or money for a down payment.

The average interest rate for a new car loan with a credit score of 600 to 609 is 6.70%.

6.70/100 x 25,000 = 1,675

1,675 x 5 = 8,375 (Number of years)

25,000 + 8,375= 33,375

= 33,375

For a 750-credit score, the average auto loan rate is about 3.48 percent for new cars and 5.49 percent for used cars

3.48/100 x 25,000 = 870

870x 5 = 4,350 (Number of years)

25,000 + 4,350 = 29,350

= 29,350

How an auto loan is different from a credit card purchase.

The credit card is an unsecured line of credit while the auto loan is a secured loan.

References

Marston, R. C. (2019). Portfolio design: A modern approach to asset allocation. John Wiley & Sons.

Snopek, L. (2018). The complete guide to portfolio construction and management. John Wiley & Sons.

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FINANCIAL PORTFOLIO PROJECT-5 2

Financial Portfolio Project: Part 5

FIN-210-Personal Finance Grand Canyon University August 15, 2022.

Financial Portfolio Project: Part 5

Insurance as a whole is a means by which people protect themselves from different types of financial loss. This can include a health and home insurance coverage (Zweifel & Eisen, 2021). These forms of insurance coverage are meant to minimize and for the management of risks, and they are taken to primarily prevent individuals against the risk of an uncertain loss. The effects of having insurance coverage, for example, a health insurance is that it increases access to care and improves health outcomes (Sommers, Gawande & Baicker, 2017).

To protect myself as well as my family against any unforeseen health conditions I will take a health insurance cover. Health Insurance is a way of mitigation of financial risk arising out of bad health condition by paying smaller amounts (around 3-5% of your total risk cover, these are called premiums) over a period of time (M. W., 2019). Health insurance protection begins when you have purchased the Health Insurance policy. With this cover, I will be certain that my health as well as of my loved one is covered.

Considering the fact that I will rent a house and in future buy one, I will take a home insurance. Home insurance is insurance coverage that is bought for protecting your home, its contents, and your possessions. Most home insurance policies provide additional living expenses that will pay some expenses if your home is damaged by an insured event to the extent that you cannot live there while repairs are being made.

References

Sommers, B. D., Gawande, A. A., & Baicker, K. (2017). Health insurance coverage and health — what the recent evidence tells us. The New England Journal of Medicine, 377(6), 586-593.  https://doi.org/10.1056/NEJMsb1706645

Zweifel, P., & Eisen, R. (2021). Insurance economics (2nd ed. 2021 ed.). Springer.  https://doi.org/10.1007/978-3-030-80390-2

III, M. W. (2019). Insurance: Concepts & coverage. Friesen Press.



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