Developing a Personal Financial Plan

Develop a personal financial plan in a scenario where you are moving to another city and must decide what to
do with your current house, as well as your housing options in the new city. Complete a budget based on your
decisions and projected new income, as well as explain your rationale for the choices that you made.
Introduction
Note: Assessments 2 and 3 build on each other. Please complete Assessment 2 before completing
Assessment 3.
Planning for Peace of Mind
When #WithMyNextPaycheckIWill first began trending on Twitter, instead of the usual witty responses, most
retweets lamented about the daily financial struggle of living paycheck to paycheck in the United States. The
vicious cycle of working just to pay bills, while never getting ahead, is an effect of both our economy and the
rising cost of living. Yet, there are financial planning measures you can use in your own life to help you take
control of your finances and your future.
By learning how to build a financial plan, you will equip with yourself with a tool and an approach to help build
your financial well-being. Understanding how to create a financial plan based on both economic trends and
your personal goals will not only make you more productive toward reaching those goals, it can also help free
you from the trap of endless financial stress. It isn’t possible to plan for all of life’s challenges and surprises,
though, so you’ll need to use your agility skill to weather the uncertainties and adapt your plan so you can feel
confident that you’re prepared for your future.
This assessment will help you practice your productivity skill (by using planning and templates to help you be
more efficient) and your agility skill (as you practice responding to a sudden life change in the scenario).
Getting Started With a Financial Plan
As you begin assembling your financial plan in this course, here are some simple techniques you can use to
improve your productivity and reach your financial goals:
Track expenses and income.
If you want to see where your money is going rather than merely guessing, you can keep a daily record of all
your financial transactions, including paychecks and bills. Here are some common third-party applications that
professionals use to track their expenses. (Note: These are only recommended tools and do not represent
tools that are specifically endorsed by Capella. Use of any of these tools is entirely at the user’s risk and may
involve the transmission of personal information. If you are not comfortable transmitting your personal
information, do not use the tool.)
Mint: A budget management tool that syncs with your accounts to track spending.
PocketGuard: Gives you a snapshot of how much you can spend at any moment.
Clarity Money: Tracks your spending and online subscriptions.
Excel: Allows you to build, track, assess, and visualize budgets from the ground up.
Reduce your expenses.
Could you cut back on takeout lunches or negotiate a better data plan with your cell phone company? Once
you start looking at how you’re spending, there are bound to be ways to save. For instance, you may be able to
receive a lower interest rate on your credit card simply by asking.
Consider your values.
To keep a balanced budget, you will need to make decisions around regular spending versus achieving your
goals. One person may be fine cutting out the fancy latte to add more to their weekly savings, but another
person may really need that daily reward to keep them motivated. Once you have a sense of how the items in
your financial plan rank in relation to each other, you can more effectively plan for your future.
Set financial goals.
Maybe, you want to pay for an extra degree, a night out at a cool new restaurant, or a vacation to Mexico.
Everyone has goals. The more specific yours are in your plan, the more focused and motivated you’ll be to
make it happen by saving, paying off debt, and growing your funds.
Try the 50/20/30 rule.
This easy-to-follow budget organizes your income like this:
50 percent for fixed expenses.
20 percent for financial goals.
30 percent for variable expenses (Hayes, 2019).
These simple techniques will not only bolster your personal financial plan; they will help you stay on track to
achieving the future you want to earn
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Financial Planning for Peace of Mind
Financial uncertainty is the single greatest stressor in Americans’ lives. When you’re stressed, it’s difficult to
stay productive toward your personal and professional goals because your mind is busy focusing on that
stress. A financial plan can help you improve your overall well-being and eliminate stressors that get in the way
of productivity. And there are a number of daily practices you can also use to take control of the stressors in
your life (Hill, 2018).
Exercise.
Getting your blood pumping at least 30 minutes each day will help your mental clarity and focus during work. It
doesn’t have to be all at once, or even athletic; you can walk the dog or play with your kids.
Reward yourself.
We are motivated by rewards, even small ones. Find little ways to push yourself to stay productive, like treating
yourself to a morning muffin.
Limit your online distractions.
It’s challenging not to get sucked into the latest posts or headlines when you’re trying to get work done. You
can limit your Internet distractions by reducing how often you check your e-mail or social media posts.
Take short, strategic breaks.
Taking breaks every 90 minutes has been proven to keep your brain more relaxed and refreshed. Don’t break
for too long, though, or you may lose sight of what you were working on. A 10–15-minute break will keep you
sharp.
Tap into your body’s rhythm.
Learning to ride your natural wave of energy throughout the day can help you stay productive. For many
people, working on bigger tasks early in the morning is best because they are more alert and focused.
Don’t ignore burnout.
Balancing your work and life is sometimes difficult to manage, but being honest with yourself and paying
attention to your body can keep you from feeling stuck or getting sick. Here are some tips to avoid burnout:
Make sure you’re getting enough sleep.
Avoid foods that make you feel too tired or full.
Go outdoors at least once every day, even for 5 minutes.
Focus on what you’re passionate about.
Modify what you can to feel fulfilled, but don’t get hung up on things you can’t control.
Adopt an agile mindset.
All of the stresses and worries in our life can spin out of control, crowd our mind, and stifle our success. Protect
your mental agility by worrying less about what others think or things you can’t control, asking questions when
you need help, trying new things that push you outside of your comfort zone, and reducing negative self-talk.
By staying mentally flexible, you’ll find it easier to adapt your mind to new scenarios and to come up with
unique solutions to problems.
You can discover further successful strategies for strengthening your agility skill in the Put Agility to Work
media in the Resources.
By taking control of your personal well-being, you’re setting yourself up to stay productive at home, work, and
school.
References
Hayes, M. (2019, January 4). 5 types of budgets and how to make one that actually works for you.
MarketWatch. https://www.marketwatch.com/story/5-types-of-budgets-and-how-to-make-one-that-actuallyworks-for-you-2019-01-03

Sample Solution

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