BE450 – Personal Financial Management

BE450 – Personal Financial Management

Assignment #1 – Goal Setting, Budget Planning and Net Worth 30 marks

This assignment is to start at the foundation of personal finance. As outline in the text, it’s best to have a ‘snapshot’ of your personal financial goals, establish a budget (and one to meet these goals) while having an understanding of your net worth.

By completing these and adapting them to your personal financial situation – you will see that not only will you attain your personal finance goals but be on track in terms of spending while increasing your wealth (net worth).

Part 1 – 5 Marks

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 – 10 Marks

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 – 10 Marks

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).

CONFIDENTIALITY is important to me. Please note due to the nature of the information, everything will be kept in the strictest confidentiality. If you have any concerns, please don’t hesitate to reach out to me and we can have a conversation.

Further, the College privacy policy is also maintained.

· Submit via the e-mail provided by the deadline.

· Submissions must be in either of the following formats: MS Word, MS Excel or pdf – only these formats are acceptable.

· If plagiarism is suspected, you will receive a grade of zero at the very least!

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