This authentic financial planning tool will help the person new to financial planning, and the experienced financial planner, write a simple financial plan. The tool includes forms to calculate material worth statements (balance sheets) and (balance sheets) yearly for five years. We hope you find it helpful.
There is a strong link between a financial plan, daily lifestyle choices, and your attitude. A financial plan built on an authentic foundation could help to lower debt, save regularly for children's education, and save to pay cash for a car, and other items.
A financial plan captures probable financial results from planned lifestyle choices. This financial planning tool shows 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 because you believe it is complicated; however I assure you that you can write a simple, basic plan using information on this site. Try it. Still, if you choose to get help, consult an independent financial advisor.
Chapter 19 of The New Managing God's Money-The Basics provides more information on writing a tailor-made, practical, 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.
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 calculable.
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?" Plans must be simple, staged, specific, and sensitive to people.
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.
Worksheets do not use your assumptions in calculations, they merely add figures you enter; they are not meant to be spreadsheets that calculate inputs.
Specific Guidelines for the Material Worth Statement (Balance Sheet)
Except for your house, show assets (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.
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.
When you are finished, "Assets Total" should equal "Liabilities & Equities (Total)" with "Other Assets" showing zero.