Develop Personal Financial Goals
Start a Word document (select an appropriate title for the document and a sub-heading for this section). Record one short-term, medium-term and long-term goal.
Determine your occupation assuming post BA graduation from chosen major.
Find a career website that provides you with average starting salary occupation chosen.
Insert your annual salary into cell B8 of the Household Income worksheet.
Use the Calculating Federal Tax worksheet to determine how much you will pay in federal tax. Insert this amount for each year in row E. You will need to perform this calculation for each year and enter it in the “Household Income” spreadsheet.
You will earn a raise of 1% per year; this will be automatically filled in for you once you enter your starting salary on the Household Income worksheet.
Build your Budget
Use the Monthly Budget Worksheet to begin developing your household budget. Remember to only enter disposable income in this worksheet.
Research online and find a source that provides you with a breakdown of how much money, as a percentage, you should be allocating towards each category listed in the Monthly Budget worksheet.
Place your findings on the Monthly Budget worksheet; in the “Average Allocation of Disposable Income” table.
Credit Cards. Through research, determine what the average monthly credit card balance is for working professionals and make a note of that in your word document. However for our purposes we are on a cash basis.
You may not have expenses related to each category of the Monthly Budget worksheet, but be as accurate and realistic as possible.
You will also need to find an actual living space from a real estate or rental property website to determine what your mortgage or rent payments are going to be. Choose according to the instructions below.
If you are purchasing a house you will need to insert a monthly amount in the Savings section of the Monthly Budget worksheet. This amount in the Savings section will represent how much you are going to save per month towards your down payment. Remember you need to provide a minimum of 20% down payment to purchase a house; conventional mortgage.
Enter a comment into the cell that explains how long it will take you to save the down payment to purchase your home.
Since this is hypothetical, you can purchase your house right now and start paying your mortgage. We will assume you have already saved the down payment. The down payment savings account will demonstrate how long it will actually take you to save the amount of the down payment.
If you are renting, you will need to factor in first and last month’s rent.
Include an appropriate sized screen shot of your new residence in the Word document.
If you are purchasing, do not forget to include the property tax. Assume you are going to make monthly payments rather than a lump sum in June.
If you have your own existing vehicle, enter the relevant amounts for transportation expenses. If you are going to purchase a vehicle you will also need to include the monthly payment. Make sure you accurately enter the monthly cost of insurance for your car.
By law your vehicle must be registered in the Province of Alberta, use the Service Alberta website to determine registration costs for license plates. Also include the annual cost of your Driver’s License.
Read the following article, The True Cost of Owning a Car, and use the relevant values to determine what the actual cost of owning (maintenance and gas) a vehicle actually is.
Investment Risk Tolerance
Use the Rutgers Investment Risk Tolerance Quiz (https://njaes.rutgers.edu/money/riskquiz/) to determine what your level of risk tolerance is. Record risk in a table, in the Word document under the same heading as this section.
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