Finanacial Plan

Joni Sabin

Plan Your Budgeting and Taxes

Creating a Budget
  • Establish net worth
  • Establish your income
  • Identify your income
  • Considering the impact of taxes
Net worth= Assets-Liabilities
Assets are anything that you OWN
Liabilities are anything that you OWE

Managing Your Liquidity

Liquidity is the ease of which an asset is converted to cash.

Liquid Assets are those assets like your checking and savings account that are on hand to meet your immediate wants and needs.

Money management and credit management decisions are BOTH involved in managing liquidity.

Money Management involves making decisions about how much cash or liquid assets t keep in reserve and how much to invest in less liquid assets, such as real estate.

Credit Management involves making decisions about getting credit and using credit.

A Plan for Your Financing

Major purchases can require borrowing money for long periods of time. It is common to pay for a portion of the cost of these purchases and to take a loan for-or FINANCE- the remaining amount. Longer-term financing is usually available at a lower cost to the borrower than can be found with credit cards. A number of factors determine how much you can borrow and the payment terms.

A Plan to Manage Your Risk

Come up with a plan to protect assets as you accumulate them. Like if you pay for a car, and suddenly destroyed by robbers? You flip out, panic, and take out loans to get another car or fix the one you have? No because you won't have to you have your plan of managing risk. Like your insurance and money you have put away. When managing risk you need to determine the types and amounts of insurance you need. Oh you also have risk management for your life!

A Plan for Your Investing

Any money/funds you do not spend should be invested so that you benefit with more money.

Common Types of Investments

  • Stocks
  • Bonds
  • Mutual Funds
  • Real Estate

Who doesn't want to make more moola without having to work more? I sure do!

A Plan for Retirement

First of all you should start saving early. Planning for this is to determine how much to save for retirement and how to invest that money. There are ways the government can assist you.

Don't you wanna be a happy old person?

A Plan for Communication and Record-Keeping

  • Communicate your financial plan to your family.
  • Keeping good records of your finances is equally important.
  • These records will help you when you file your taxes and calculate your net worth.
  • Your heirs may also need these records at some point as well.
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