Financial Planning

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Contents

1. Overview
2. Goals & Plans' Definitions
3. Completing The Worksheet
4. Detailed Goals
5. Detailed Plans
6. Assumptions
7. Material Worth Statement $000
8. Cash Flow Statement $000

Overview

This financial planning guide will help the person new to financial planning, and the experienced person, write a simple financial plan. It includes forms to calculate material worth statements (balance sheets) and income statements, annually for five years. We hope you find it helpful.

There is a strong link between a financial plan and daily lifestyle choices. With the right attitude, a financial plan could help to lower debt, save regularly for children's education, and save to pay cash for a car, and other stuff.

A financial plan captures probable financial results from goal setting. It reflects in different forms, your likely financial picture from doing goals and plans during a specific future period.

You might hesitate to write your financial plan, but I assure you that you can write a simple, basic plan using information on this site. Still, if you choose to get help, consult an independent financial adviser.

If you sense the Lord telling you to write a financial plan, ask Him to guide you through the process. Chapter 19 of The New Managing God's Money-The Basics provides more information on writing a financial plan, and shows a step-by-step guide to developing a plan for a fictitious family.

Use the forms below to assist you on this journey that starts with your goals and plans.

Goals & Plans

A goal is the destination, answering these questions: "What am I trying to do?" or "Where am I trying to go?" Goals must be clear, complete, concise, and measurable.

Plans describe steps needed to do each goal. They answer the question, "how"? "Spending plans" that you show in the expenses section below, answer questions: "how much" and "when?"

As you start this journey, describe each goal you sense you should be working on, its sub parts, and show when you will finish each. After, write accompanying plans (the plan box is expandable) as a precursor to working through the worksheets.

Completing The Worksheets

You need to decide assumptions that might apply to your circumstance. Items we show below might be irrelevant to you. We added this section as a reminder to help you think about what might happen in the coming years.

Worksheets do not use your assumptions in calculations. Each worksheet merely adds figures you enter. These sheets are not meant to be spreadsheets that calculate inputs.

By clicking the buttons below, you can save fully or partially completed forms and then restore them for future use.

Except for your house, show stuff you own at prices someone is likely to pay for them--market prices. For your house, show it at the lower of cost or market.

As you complete each worksheet, it calculates totals automatically. When you enter asset figures, notice "Assets (Total)" equals "Other Assets" in the "How You Financed Assets" section below. If you enter 250 for a house, you will see 250 for "(Assets) Total" and for "Other Assets."

When you finish entering all assets and go to the "How You Financed Assets" section, each figure you enter there shows up in " Liabilities & Equity (Total)," and reduces "Other Assets," correspondingly. If you enter more Loans and Equity than Total Assets, "Other Assets" will show negative. This means, either Liabilities & Equities are too much, or you need to add more assets. So, if "Assets Total" shows 10000, and you enter 8000 for mortgage, you will see 2000 under "Other Assets." And if you enter 12000 under mortgage, you will see -2000--"Assets Total" should equal "Liabilities & Equities (Total)" with "Other Assets" showing zero.

You will get an error message if you press "enter" after each entry. Either use the tab key to move from one field to another, or place the cursor in the field in which you wish to enter an amount. We pray you find this section helpful and would appreciate your comments.

Goals Description	Target Date of Completion

Plans

Assumptions

(This reminder list isn't exhaustive. Some items might not apply to you; use items that could be relevant to your circumstance)
Salary at Start	$'000
Savings at End	$'000
General inflation (This could apply to items like groceries. You decide how costs might rise in the period)	%
Average Borrowing Costs (If in debt, check your loans to see interest rates. This is a reminder to add interest cost on outstanding debts)	%
Tax Rate (This might not be relevant. It's here to remind you to provide for tax payment on savings, investments and business income)	%

Material Worth Statement $000
Assets (what you own)	Year 1	Year 2	Year 3	Year 4	Year 5
House
Car
Savings





Assets (Total)	AT1	AT2	AT3	AT4	AT5

How You Financed Assets	Year 1	Year 2	Year 3	Year 4	Year 5
Mortgage
Car Loan



Your Equity
Other Assets (When finished, if not zero, recheck inputs)	A91	A92	A93	A94	A95
Liabilities & Equity (Total)	LT1	LT2	LT3	LT4	LT5

Projected Income $000	Year 1	Year 2	Year 3	Year 4	Year 5
Gross Salary
Other Income
(Subtotal: Gross Income)	IT1	IT2	IT3	IT4	IT5
Less: "Giving"
Less: Taxes
Less: Capital Fund


Sub Total: Giving, Taxes, Capital Fund:	OT1	OT2	OT3	OT4	OT5
Net Income: Available to Spend	NNT1	NNT2	NNT3	NNT4	NNT5

Cash Flow Statement $000
Projected Spending Plan $000	Year 1	Year 2	Year 3	Year 4	Year 5
Food
Mortgage Payments or Rent
Other Housing Costs
Clothing
Car Loan
Transport (Excl. Car Loan)











Entertainment
Other Expenses (Minimize this category)
Contingency (This amount is for surprizes. It shouldn't be more than 5% of the total; less as you gain experience.)
Spending (Total)	ET1	ET2	ET3	ET4	ET5

	Year 1	Year 2	Year 3	Year 4	Year 5
Net	NT1	NT2	NT3	NT4	NT5
Cumulative	CT1	CT2	CT3	CT4	CT5