Hypothetical Financial Plan Research Assignment

Hypothetical Financial Plan
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Institution
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Hypothetical Financial Plan
A financial plan is an important tool because it helps you determine how your money will be spent. A financial plan is an inclusive financial statement indicating an individual current and future financial status (Bhate & Bansal, 2015). These include cash flow, asset values, and spending plans. People draw financial plans using an individual net worth, tax liability, assets and future goals to develop a comprehensive financial goal to meet their future needs (Bhate & Bansal, 2015).
A good financial plan clarifies the present situation by assessing financial data like assets, liabilities among others. A good financial plan should indicate financial and personal goal and objectives. When developing a financial plan, it is important to identify financial challenges that can create barriers to achieve your financial goals (Bhate & Bansal, 2015). By identifying financial challenges will help you achieve financial independence. Some of the common challenges include high insurance premium, high tax burden among others. The financial plan needs to state specific recommendations and alternative solutions (Bhate & Bansal, 2015).
The recommendations need to be put into action by through proper reorganization of the finances to reach the desired objective. A financial plan is meant to assist in executing certain financial recommendations (Bhate & Bansal, 2015). The following are my future financial goals, the first one is to pay less tax, become financially independent, maintain a good living standard, especially after retirement, earn a high rate of return on investment, my other financial goals is to learn to invest and manage money wisely and even start my business.
Achieving financial independence requires a cash flow to analyze how my money is moving. A cash flow is important because to helps track my expenses, providing a better understanding of where my money goes. A cash flow statement also provides me with a clear picture of how much money I have, showing how I can distribute money for each item that is necessary(Bhate & Bansal, 2015). Some of the recurring expense like food, housing, education, health care and transportation needs to be factored into the cash flow. Most spending goes towards paying off credit card and retirement payment. A cash flow statement also provides with a better insight of saving and investing by identifying where money is likely to be wasted (Bhate & Bansal, 2015).
A financial plan is imperative because it enables one take charge of the available finance. With a good financial plan, one poses an effective tool to decide exactly what will happen to the earned money and when. A financial plan provides an opportunity to prioritize our activities, especially when it comes to spending and identify investment opportunities by cutting down on unnecessary expense (Bhate & Bansal, 2015).
Below is a hypothetical financial plan
Cash flow
Income

Annual amount

Percentage amount

Income before being taxed

$100,000

100

Income Taxes & Deductions

$24,169

24

Income after tax

$75,831