BE450- Personal Financial Management Assignment #1 - Goal Setting, Budget Planning and Net Worth- Mohawk College
Part 1
Part 1 is to establish your goals. Write down your goals. Create a timeline to achieve them. 1 year? 2 year? 5 years? What financial goals would you like to achieve?
What are some of the challenges you feel to attain them? What are some of the positive steps you can take to achieve them? How would you define success for these goals?
Part 2
Now that you have established your goals, it is time to look at your budget. Create your budget as of a specific date. The intent here is to estimate, and then apply to see if you were within budget.
Then, choose a week in the given month (or a month to get an even better picture). During the week, track your income and expenses daily during this budget period using any method you find effective (i.e. some people choose to use their debit card or credit card for all purchases and reconcile their monthly statement, others choose to save all receipts for all purchases, some prefer to keep a manual diary of all purchases made, and of course there are many different apps available for your iPhone that are great and easy to use).
At the end of the period, consolidate your expenses into categories and compare actual numbers to your original estimates on an Excel spreadsheet/worksheet (please note, you are not penalized from being far from your original estimates, the more accurate your data, the more meaningful this assignment will be for you). Show your budget versus your actual and any variance (difference).
Analyze where your discrepancies are and why. Provide narrative on your analysis including what you have learned from this exercise. Were their unexpected expenses? Were income levels different than expected? Narrative will be assessed based on thoroughness, insight, breadth and depth. Using this analysis, make a new budget for the first two weeks in June (reflecting your changes, and adjustments).
You may use any template you see fit - whether it be an excel document, or online. If it is online - within the report you will have to copy it formally for submission.
Part 3-
Finally, part 3 is your net worth strategy. Complete a personal balance sheet on a specific date.
There are many templates online for a personal balance sheet, but it is identified on page 69. A personal balance sheet is the amount of assets less any liabilities. This is critical and used when it comes to financing for mortgages, credit evaluation and so forth. A consistent negative net worth can lead to insolvency.
The objective of this part is to create an awareness of your overall wealth in helping you provide that snapshot. Through the 2nd component of the budget, you are able to identify strategies to achieve your goals (part 1) in building your overall net worth (part 3).
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.