Personal Financial Plan

Topics: Balance sheet, Asset, Tax Pages: 11 (2798 words) Published: November 15, 2010
Financial Plan Project


ADM 3445 E. Otuteye

March 31st, 2010

1. Personal Characteristics/Goals

The following consist of a constructed financial plan for Tyler Sisson. He is a single 22 year old and is completing his fourth year in the business program at University of New Brunswick. He has an apartment on Montgomery street, were he walks to school everyday, and plans to purchase a vehicle after university. He has been working a part-time job at Canadian Tire during the school year. Tyler’s main focus at university is marketing and is looking forward to commencing a career in that field.

2. Sources of Income

Tyler’s source of income is through working at Canadian tire were he receives $10.50 per hour while working 25 hours per week. For working with Canadian Tire, he gets 20% off anything in the store. This helps him purchase things needed at a lower price. He just receives pay for the hours worked, with no bonuses. Tyler has no pension plan set in place.

He has future plans of finding a marketing position and become successful in that field. Since he’s currently in the last year of the business program, and many opportunities are now arising. Tyler plans on starting the career of his dreams immediately. He has been looking at marketing jobs in sports business, and has found many positions. His hopes of beginning at an annual salary of $45,000 and building that up over the years.

Recommendations for Tyler would be to spend the money he has now wisely, and think of saving some in case theirs no employment directly after university. If there is no employment right after university, he should not give up on his goal. His business degree could be used in another field, if marketing doesn’t pan out.

3. Personal Balance Sheet
Tyler Sisson
Personal Balance Sheet as of December 31, 2010
Liquid Assets
Chequing account balance:………… $ 120
Savings/money account……………… 720
Total Liquid Assets $ 840 Personal Possessions
Cell phone……………………………. 400
Laptop computer……………………… 650
Furniture/ Appliances………………… 500
Total household assets $ 1550
Total assets $ 2390 Liabilities
Current Liabilities
Credit card balance……………….. 100
Long-Term Liabilities
Student loan………………………. 900
Total Liabilities $ 1000

Net Worth ( assets - liabilities) $ 1390

Tyler will need to set aside money each month to help pay some of his credit card bill and reduce the owning on his student loan. He will then notice his net worth increasing by accomplishing these liabilities.

1) Debt Ratio - liabilities divided by net worth
1000/1390 = 0.72
This demonstrates Tyler’s debt and net worth. A lower debt ratio would be better for him because 0.72 is the maximum limit he would be allowed to use.
2) Current Ratio - liquid assets divided by current liabilities 840/100 = 8.4
This shows that $8.40 in liquid assets for every $1 of current liabilities. This is good for Tyler because the high current ratio allows him to spend money available on bills.

My recommendations for Tyler would be spend his money wisely and try to keep his liabilities down, to have more net worth. His current ratio is at a good rate and keeping that high gives him more options on his money. This will allow him to pay his student loan off quicker. He also needs to spend his extra money on bills before buying unnecessary items. By staying up to date on his payments it will allow him in the future to purchase items that he needs, like I stated earlier a car and possibly living situations.

4. Personal Cash Flow Statement

Personal Cash Flow Statement for Tyler Sisson
Cash Flow Statement...
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