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Unformatted text preview: The first step to developing a personal financial plan is to determine goals. I have found it effective to set some shot term goals, some intermediate, and some long term. My short-term goals are to create a $2000.00 savings buffer, pay off my current car, and complete my Associates degree. My intermediate goals are to create a $5000.00 savings buffer, complete my Bachelors degree, Move into a bigger home, and start a retirement account. My long-term goals are to have a $10000.00 savings buffer, complete my Masters degree, and be effectively saving towards retirement. For the first two areas I have set a time limit of 2 years. The third is without a time limit. For the short-term goals I have determined that it will be necessary to save $83.00 a month in order to reach this goal by the end of the second year. I am planning to save $100.00 per month. I do not plan on using the savings account, but in the event that I do a slight buffer might help. Concerning the car loan. The total amount owed is $2300.00. We are paying $300.00 per month right now so that we can have it paid for as soon as possible. At this rate we will have it paid in full in 8 months. I have 12 credits left to complete my AA. I will have met this goal in just less than 18 weeks. There is no financial obligation to meeting this goal, but there will be a lot of high fives going around. For the first intermediate goal I will need to save an additional $3000.00. This will require a monthly savings of $130.00. I am planning to save at least $150.00. This will allow me to meet this goal earlier and give a slight buffer. I would also like to place $150.00 into a retirement account per month. This is not a huge amount but I think it will be a good place to begin. At the end of the two-year period this will give me a principle balance of $3600.00. For the bigger home goal I would like to keep the mortgage around $2000.00. This will but us just over the current median house range $250000.00. For education I am going to be able to begin my BA with 42 remaining credits. This will take some where around 70 weeks to complete. Completing this degree will require no financial obligation. When this is done there will be high fives accompanied by some epic chest bumps. During this long-term goal portion of my life I plan to make it through this first goal as quickly as possible. If I save $500.00 a month I will have my savings account where I would like to see it in ten months if not sooner. During this first year while I am still creating the buffer account I would like to keep the retirement account savings at the $150.00 as determined by the intermediate-goals mandate. After this time I would like to bump the savings up to the maximum tax free savings rule, which is $10000.00 per year. My masters degree should only take 18 months and I believe it is going to cost somewhere in the neighborhood of $4000.00 to complete. neighborhood of $4000....
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This note was uploaded on 07/20/2010 for the course COM220 COM220 taught by Professor Doug during the Spring '10 term at University of Phoenix.
- Spring '10