Personal Financial Planning

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Setting goals is one of the essential factors that help one reach their desired success. Simply setting goals does not guarantee their achievement in the future, and therefore, it is vital to establish a plan while setting the goals (Altfest, 2004). Planning my financial goals will offer a sense of direction for my day to day actions. With this plan, I will be able to find help on the decisions that I make to reach my goals. As far as my goals are from this day, the more pressing it is to start my planning today for tomorrow’s success. My personal financial goals comprise of both long-term as well as short-term goals. This paper presents a personal financial statement that begins with evaluating my current financial situation as the first step. The next step involves the development of financial goals. The third step presents the identified alternatives to achieving the objectives followed by the evaluation of these alternatives. Finally, I have created my financial action plan that details the steps that will lead to the achievement of my goals. In the last section, I will present a review of the financial plan to validate this plan’s credibility. 

Step One: Determining Current Financial Situation

To formulate my goals and develop strategies for achieving them, I have to evaluate and understand my current financial position (Asher, 2011). My current position is significant in helping me to set realistic and achievable goals. Also, to identify some specific changes, I should make to change my status is necessary to achieve the goals that I will create in the planning process later in this plan. Identifying my current net worth depends on the current financial state. Net worth is calculated by subtracting my current liabilities from my existing assets. Assets include all that I have that has significant value. The assets I have include cash on hand and cash equivalents, which are physical cash on hand, savings account, checking accounts, personal property such as equity at home, poultry, tree nursery, and invested assets like bonds. My current liabilities are bills, debt, utilities, and education loan. The following tables represent my current financial status information.

Cash and Cash Equivalents
Cash on hand$ 1000
Savings account$ 3000
Checking account$ 1500
Life insurance value$ 2500
Money people owe me$ 500
Total Cash Equivalents $ 8, 500
Personal Property
Equity at home$ 15000
Poultry firm$ 7000
Tree Nursery$ 4500
Total Personal Property$ 26500
Invested Assets
Bond$ 3000
Total Invested Assets$ 3000
Total Assets$ 35, 300
Current Bills
Utilities$ 200
Family Upkeep$ 1000
Insurance Premiums$ 250
Total Current Bills$ 600
Outstanding Debt
Education Loan$ 3000
Total Outstanding Debt$ 3000
Total Liabilities$ 6600
Total Assets$ 35, 300
Total Liabilities$ 6, 600
Net Worth$ 28, 700

Step Two: Financial Goals Development

Developing financial goals is the next step after evaluating the current financial status in the previous stage. This step will help me find the direction for my plan and set me off to my destination. I will consider apparent objectives, including monthly savings, retirement savings, and building up my home.  I will also consider other goals that might require financial input, such as paying my wife’s dowry and wedding. I have to make my goals SMART in that they are Specific, Measurable, Attainable, Realistic, and Timely (Werle Lee, 2010). Developing these goals will help me remain focused on the future and ensure my objectives are met. I have to get the real difference between necessities and wants while developing this plan. The following tables outline my SMART goals. These goals include both short-term and long-term goals.  My short-term goals include all the goals that I need to achieve in less than one year. Intermediate goals involve those goals that I should meet in the range of 1 to 10 years, and finally, long term goals are those that span beyond the period of 10 years.

Short-Term Goals ( less than one year)
PriorityGoalDurationMonthly CostTarget Date
HighUtilitiesOne month$ 200Monthly
MediumHome RepairsSix months$ 1000Monthly
MediumHome ImprovementMonthly$ 500Monthly
HighGarden SuppliesMonthly$ 300Monthly
HighGroceriesMonthly$ 500Monthly
HighGas and FuelMonthly$ 250Monthly
LowEntertainmentMonthly$ 10Monthly
MediumPersonal NeedsMonthly$ 250Monthly
Intermediate Goals ( 1 to 10 years)
PriorityGoalDurationMonthly CostTarget Date
HighDowry2 years$ 1000December 2022
MediumBuild New House4 years$ 30, 000 January 2025
MediumSave for retirementEight years$ 650January 2029
HighBuild emergency fundMonthly$ 450Monthly forever
HighPay mortgage loanMonthly$ 500January 2022
Long-Term Goals ( over ten years)
PriorityGoalDurationMonthly CostTarget Date
HighPay off Education Loan Three years$ 150June 2024
HighService 2 credit cards Monthly$ 100Infinite

Step Three: Identifying Alternative Courses of Action

Up to this point, I have evaluated my current financial capability and established some SMART short-term, intermediate, and long-term goals. These set goals can’t be achieved by simply creating them. They require strategies that will help bridge the gap from my current state financially to where I would want to be in the future (Sukanya, 2019). Just as there are various routes to getting to a particular point; there are also alternatives to reaching my goals and achieving the financial status that is better than today. These courses of action will help me find a path to making my goals through various ways of generating income if the main course of action fails. Every goal set has an alternative way of attaining; for example, building a new house will require me to find a better way to produce some of the materials to supplement the initial budget and distribute the excess funds that would acquire such materials into other assets that are appreciating within that period. This section presents the alternative courses of action that I can take to accelerate my achievement of the set goals.

I have two credit cards to service over the set period as one of my intermediate goals. I will have to decide how to do this better instead of adding the expenses to the main activities I will partake. In this case, I will dedicate some cash I receive from my salary to service the credit cards while the sum I get from the tree nursery business will be supplementing my daily home care needs. As per my financial position, I might do away with vacations, which I have allocated $ 1000 after three months. According to my goals, holidays are wants and, therefore, might wait as I pursue the high priority goals. Afterward, after my clearance of the education loan, I will embark on planning for a vacation since I will have more cash to spare in this case.

I will also try as much as I can to limit unnecessary travels to reduce my gas/ fuel expenses by $ 50. Some of the items included in my care might not be so urgent, and therefore I will try to cut down on some funds meant for things like clothing and only purchase when it need arises. This will cut my care budget by $ 30 every month. These are good saving habits that will help me free-up enough cash to boost my current savings, which I will deposit to my savings account for maturity purposes. From the principle of good saving habits, it is necessary to cut costs when resources are little in some cases. Risks are inevitable and require readiness. Therefore, using good saving habits will save me some amount that I can compensate for such cases or emergencies which might occur in daily life like a sickness. These savings to cover risks will be deposited into the emergency fund account.

Conventionally, building an alternative course of action has two categories. One can choose to reallocate resources from one goal to another depending on the priority assigned and two; it is also advisable to generate new sources of income (Sukanya, 2019). Earmarking current savings can help utilize existing resources or another way could involve reallocating the funds to my identified high priority tasks. To generate new resources, I am planning to make some changes to my current job. Professionally, I work as a Systems Developer in the web application arena. In my practice, I noticed that I could make outstanding responsive websites for my clients. Therefore, thinking of improving my earnings from my job will push me to learn some aspects of internet marketing and Search Engine Optimization (SEO) so that I can convince my clients to pay more for e-commerce websites. The other possibility is to implement a plan to generate more income by using the garden service allocations to improve garden farming. Here I can sell some products like vegetables to increase the earnings and boost my savings capability. 

From the goals I set in the previous section, I need to select one objective from each category, as stated. I will have to consider the target date for the fixed objective achievement and the monthly cost associated with it. I have brainstormed some of the strategies of reaching every goal, and therefore, I will use both strategies I have defined in the previous section. The following tables summarise my approach for the set goals with a set of alternatives. 

Short-Term Goal: Garden Supplies
Target Date: Every monthMonthly Cost: $ 300
Strategy 1: Plant garden items that I can sell to generate an extra source of income.
Strategy 2: Reduce the expenses for personal needs and improve garden care to gain more income 
Strategy 3: Limit Unnecessary travels to reduce expenses on fuel and gas.
Intermediate Goal: Build a new house
Target Date: December 2024Monthly Cost: $ 800
Strategy 1: Device a way to get some of the material on my own.
Strategy 2: Reallocate the reallocate some funds from the vacation savings and boost this saving
Strategy 3: extend the resources from the tree nursery to this project.
Long-Term Goal: Service 2 credit cards
Target Date: Every monthMonthly Cost: $ 400
Strategy 1: Limit wants in personal needs and cut down the credit card bills.
Strategy 2: get an alternative source of income to cater for some emergencies and save on using credit cards.
Strategy 3: service all the debt for credit cards after one year and avoid credits to increase savings.

Step Four: Evaluating Alternatives

At this point, I have identified some of the many alternatives to achieving my goals and therefore am faced with the decision on which course of action I will take. Every person has different strategies for achieving goals, and therefore, in this case, I have to choose wisely based on my capability. This step involves evaluating the previous step’s alternatives to select the most favourable (Joo & Choe, 2017). Therefore, in this section, I decided to assess every strategy in-depth to gain more insight on which route to follow to accomplish my goals.

Assessing my goals involves consideration of the pros and cons of every strategy. The selected an option might not work as expected, and therefore this step requires keen analysis from the excel sheet I made to calculate my net worth and savings plan. I have also looked at the rate of income generation and sustainability expected to make sure that I am gaining a return on the investment, which equates to savings. I have also gauged that change in income generation strategies will improve my cash assets and limit the liabilities (Chen & Tian, 2019). Some obligations originate from unnecessary wants that I have eliminated in the previous sections. The following tables give a snapshot of my evaluations for various alternatives.

Goal: Build a New House

Strategy 1: Get homemade material
Will save the Cost of acquiring material from hardware and suppliers.Generating materials might require funds for machinery and workforce, for example, using machine cut stones.
We, Will, cut down some budgetary allocations and get the project done earlier than expected. The budget should balance with the other goals to make sure that it does not affect other resources. 
Strategy 1: Extent tree nursery resources to the project
Reallocation will save on the budget and reduce the timeframe of implementation.The Tree Nursery might not yield an expected profit compared to the investment making it difficult to slice some costs.

Step Five: Creating and Implementing My Financial Plan

This step is the last and simplest since the rest of the work has been accomplished. The process involves creating rules and guidelines that will help me remain focused on the goals. In this step, I will collect all possible acquisitions that require financial input and start working on my goals. I will use Microsoft Excel spreadsheets to get the specific figures to work on this journey. While working on this plan, I have to keep discipline a priority to avoid confusion and deviations from the plan. I am cautious about the steps I will use to implement this plan and, therefore, will have to value the work more than the goal. I will also set some key performance indicators and milestones for my plan to remain updated on the stages of achievement.


Altfest, L. (2004). Personal Financial Planning: Origins, Developments, and a Plan for Future Direction. The American Economist48(2), 53-60.

Asher, A. (2011). Developing a Harvesting Plan: Optimising Retirement Spending in the Face of Economic, Social, and Personal Risk. SSRN Electronic Journal.

Chen, X., & Tian, W. (2019). A consistent investment strategy. Journal Of Investment Strategies.

Joo, S., & Choe, H. (2017). : Financial Planning Review 1000 (Review of Personal Financial Planning Research: 10 Years of Financial Planning Review). SSRN Electronic Journal.

Sukanya, N. (2019). Economic Growth, Saving Habits, and Trends in Domestic Saving in India in Recent Years-An Analysis. Journal Of Commerce And Management Thought10(3), 331.

Werle Lee, K. (2010). Planning for success: setting SMART goals for study. British Journal Of Midwifery18(11), 744-746.

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