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  1. 1. baj01275_app_433-454 02/09/2007 17:10PM Page 433 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS
  2. 2. baj01275_app_433-454 02/09/2007 17:10PM Page 434 EPG_Team-C 105:JWQD032:bajapp: 434 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 1 Organizing Your Financial Records Financial Record Specific Items Safe General Category Within Category Filed Lockbox Deposit Auto Insurance policy Title information Repairs/expenses Auto loan/lease information Bank Checking statements and records Savings statements and records Credit Records for each loan or credit account Credit reports Applications for credit Home Mortgage documents and records Homeowner’s insurance Receipts for repairs/capital improvements Rental contracts Children Report cards School photos School policies/procedures manual Records of child-care expenses Birth/adoption certificates Life /estate Life insurance policies Billing records Copy of wills Copy of estate plan Medical Billing and insurance records Prescription drug records Health insurance policy Health/immunization records Employee benefits Periodic reports from retirement plans Employer information Other insurance and benefits Taxes Tax statements from employer(s) Tax statements from investments and loans Tax returns Receipts for next tax year Budget and bills Current bills payable Bill receipts Budget records Investments Records of purchases and sales Account activity statements
  3. 3. baj01275_app_433-454 02/09/2007 17:10PM Page 435 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 435 WORKSHEET 2 Personal Balance Sheet Directions: 1. List the current values of your assets and your debts. 2. Compute Net worth Total assets Total debts Assets Debts Checking accounts $ Current bills Savings accounts 1. $ Money market accounts 2. U.S. savings bonds 3. Cash value of life insurance Other short-term Total current bills investments Total liquid assets Credit card balances (list) Cars 1. Home furnishings 2. Jewelry/art/collectibles 3. Clothing/personal assets Alimony/child support Total personal property owed Market value of Taxes owed (above with- investments (stocks, holding) bonds, mutual funds) Personal loans Employer retirement Car loans plan(s) Total short-term debts Individual retirement account(s) Home mortgage balance Other retirement savings Home equity loans College savings plan Other real estate loans Other savings plans Student loans Total investment assets Other investment loans Market value of home Other liabilities/debts Market value of investment Total long-term debts real estate Total debts Total real property Total assets
  4. 4. baj01275_app_433-454 02/09/2007 17:10PM Page 436 EPG_Team-C 105:JWQD032:bajapp: 436 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 3 Personal Cash Flow Statement Directions: 1. List all your cash inflows and outflows. 2. Compute Net cash flow Total cash inflows Total cash outflows Cash Inflows Cash Outflows January 1 to January 1 to Monthly December 31 Monthly December 31 Salary/wage Income and income (gross) payroll taxes Interest/dividend Groceries Income Housing Other income Mortgage or rent (self-employment) Property tax Rental income Insurance (after expenses) Maintenance/ Cash from sale repairs of assets Utilities Student loans Heating Electric Scholarships Water and sewer Other income Cable/phone/ Gifts satellite Total Cash Car loan Inflows payments Car maintenance/ gas Credit card payments Other loan payments Other taxes Insurance Life Health Auto Disability Other insurance Clothing Gifts Other consumer goods Child-care expenses
  5. 5. baj01275_app_433-454 02/09/2007 17:10PM Page 437 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 437 WORKSHEET 3 Personal Cash Flow Statement (cont.) Sports-related expenses Health club dues Uninsured medical expenses Education Vacations and travel Entertainment Alimony/child support Charitable contributions Required pension contributions Magazine sub- scriptions/books Other payments/ expenses Total cash outflows
  6. 6. baj01275_app_433-454 02/09/2007 17:10PM Page 438 EPG_Team-C 105:JWQD032:bajapp: 438 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 4 Spending Log Directions: Copy this worksheet and use it to keep careful track of all your expenditures for one or more weeks. Monday Tuesday Wednesday Description $ Description $ Description $ Thursday Friday Saturday/Sunday Description $ Description $ Description $
  7. 7. baj01275_app_433-454 02/09/2007 17:10PM Page 439 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 439 WORKSHEET 5 Personal Financial Ratios Directions: Use your personal financial statements to calculate your personal financial ratios. Record them on this worksheet, critically evaluate your current financial situation, identify areas to work on, and reevaluate periodically to track your progress. Personal Financial Criteria __/__/__ __/__/__ __/__/__ Net worth Net cash flow Liquidity ratio Liquid assets Monthly expenses Debt ratio Total debt Total assets Debt payment ratio Total monthly debt payments After-tax monthly income Mortgage debt service ratio Monthly mortgage debt service Gross monthly income Savings ratio Monthly savings After-tax income Overall evaluation of current finances: Specific areas that I need to work on:
  8. 8. baj01275_app_433-454 02/09/2007 21:13PM Page 440 EPG_Team-C 105:JWQD032:bajapp: 440 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 6 Household Credit Summary Most Recent Interest Annual Minimum Finance Balance Type of Debt Rate (APR) Fees Payment Charge Still Owed Credit cards Student loans Auto loans Other consumer loans Home equity loans Mortgage loans Totals
  9. 9. baj01275_app_433-454 02/09/2007 17:10PM Page 441 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 441 WORKSHEET 7 Assessing Your Creditworthiness Using the Five C’s of Credit Directions: 1. Complete a consumer credit application. 2. Using this information, rate yourself on each of the five c’s of credit, using the following scale: 4 excellent; 3 good; 2 needs work; 1 unacceptable. 3. Based on your assessment, identify goals for improving your creditworthiness. Score Notes: Capacity Wage, salary, and other income sufficient to make payments Affordable current monthly payment obligations Capital Positive net worth, appropriate for life-cycle stage Collateral Valuable assets in addition to income (checking, savings, investment accounts) Adequate collateral for loan (if applicable) Character Previous experience with credit Past credit history indicates a good attitude toward repaying debts No history of bankruptcy Stable employment and residency Conditions Job and employer security General economic conditions favorable Plan for improving creditworthiness:
  10. 10. baj01275_app_433-454 02/09/2007 17:10PM Page 442 EPG_Team-C 105:JWQD032:bajapp: 442 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 8 Automobile Costs Log Sheet Lease/ Tolls Repairs Loan Auto and and Registration Monthly Date Payment Fuel Insurance Parking Maintenance and License Total January February March April May June
  11. 11. baj01275_app_433-454 02/09/2007 17:10PM Page 443 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 443 WORKSHEET 8 Automobile Costs Log Sheet (cont.) Lease/ Tolls Repairs Loan Auto and and Registration Monthly Date Payment Fuel Insurance Parking Maintenance and License Total July August September October November December
  12. 12. baj01275_app_433-454 02/09/2007 17:10PM Page 444 EPG_Team-C 105:JWQD032:bajapp: 444 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 9 Automobile Options Checklist Before shopping for a car, evaluate your needs and wants. Must Have Would Like Automatic transmission All-wheel drive Dual front airbags Side curtain airbags Air conditioning Antilock brakes Power seats Power windows and doors Sunroof Upgraded music system Computer navigation system Extra-sized gas tank Split rear seat Leather interior Driver seat lumbar adjustment Third row seats Cruise control Other Other
  13. 13. baj01275_app_433-454 02/09/2007 17:10PM Page 445 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 445 WORKSHEET 10 Lease Versus Buy—Automobile Cost of Leasing Capitalized cost reduction and security deposit Foregone interest on capitalized cost reduction and security deposit Total lease payments ( monthly payment months) Expected end-of-lease charges Less return of security deposit Total cost of leasing Cost of Buying Down payment Foregone interest on down payment Total loan payments ( monthly payment months) Less expected end-of-loan value Total cost of buying
  14. 14. baj01275_app_433-454 02/09/2007 17:10PM Page 446 EPG_Team-C 105:JWQD032:bajapp: 446 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 11 Lease Versus Buy—Housing Cost of Renting 1 year 5 years Total rent payments ( monthly 12 year) Renter’s insurance ( $ year) After-tax interest lost on security deposit ( months rent @ % year) Total cost of renting Cost of Buying 1 year 5 years Total mortgage payments ( monthly principal and interest 12 year) Property tax Homeowner’s insurance Private mortgage insurance (if 20% down 1 2% of mortgage year) Repair and maintenance expenses Down payment Closing costs Lost after-tax interest on down payment and closing costs (@ % year) Subtotal: costs Less savings from repaying principal Less appreciation of home (@ % year) Less tax savings from interest deduction Less tax savings from property tax deduction Less tax savings from points deduction Subtotal: savings Total cost of buying (costs savings)
  15. 15. baj01275_app_433-454 02/09/2007 17:10PM Page 447 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 447 WORKSHEET 12 Calculating Affordable Home Price STEP 1. Monthly amount you can allocate to total housing costs STEP 2. a. Expected cost of property taxes b. Expected cost of homeowner’s insurance c. Expected cost of repairs and maintenance d. Expected cost of association dues e. Total nonfinancing housing costs ( a b c d) Total available for financing costs (principal and interest) ( Step 1 2e) STEP 3. a. Mortgage factor,i,n (Exhibit A-6, 6%, 360 months) b. Total available for financing costs (from Step 2) c. Maximum affordable mortgage amount ( 3a 3b) STEP 4. a. Down payment available b. Gifts from parents or others c. Expected closing costs d. Maximum house you can afford ( 3c 4a 4b 4c)
  16. 16. baj01275_app_433-454 02/09/2007 17:10PM Page 448 EPG_Team-C 105:JWQD032:bajapp: 448 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 13 Evaluating Mutual Fund Alternatives Directions: Identify an investment objective for which mutual fund investments would be appropriate. Based on your objectives, time horizon, and risk tolerance, identify the fund classification(s) you wish to consider. Evaluate alternative funds by completing this worksheet. 1. Investment Objective 2. Appropriate type of fund Mutual Fund Alternatives A B C Company name Fund objective Price per share Net asset value Minimum initial purchase Minimum additional purchase Past performance 1-year 3-year 5-year Expenses Front-end load Back-end load Expense ratio Fund manager tenure Services Auto deduction Auto reinvestment Transfer between funds IRAs Online access Ratings Agency Agency
  17. 17. baj01275_app_433-454 02/09/2007 17:10PM Page 449 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 449 WORKSHEET 14 Mutual Fund Tracker Mutual Mutual Mutual Mutual Mutual Mutual Total Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Portfolio Fund name Fund family Investment objectives Portfolio composition Industry or sector Net asset value Price per share Number purchased Front-end load paid Total initial investment Date Market or Net Asset Values
  18. 18. baj01275_app_433-454 02/09/2007 17:10PM Page 450 EPG_Team-C 105:JWQD032:bajapp: 450 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 15 Retirement Goals Directions: For each of the following retirement goals, indicate its importance to you by checking the appropriate box. Very Somewhat Not At All Retirement Goal Important Important Important Economic security Maintain standard of living Improve standard of living Financial independence Afford to keep home Family Bequests to heirs College costs Support children or parents Continue family business Medical Cover health-care costs Extras Better/more vacations Increased hobby costs Contributions to charity Other
  19. 19. baj01275_app_433-454 02/09/2007 17:10PM Page 451 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 451 WORKSHEET 16 Retirement Planning STEP 1. Estimate before-tax income needs. a. Enter current household expenses. b. Adjust for changes in expenses in retirement. Possible reductions: Employment expenses Retirement savings Housing expenses Total reductions Possible increases: Health care insurance Leisure activities Gifts donations Total increases c. Adjusted expenses in current dollars (1a 1b 1c) d. Adjust for inflation to future dollars (i expected inflation; n years to retirement). Aftertax income needs Adjusted expenses in current dollars (1 i)n e. Calculate before-tax total income needs. $ Before tax $ After-tax (1 average tax rate) STEP 2. Estimate annual retirement income from defined benefit retirement plan(s). Use most recent statement from your pension sponsor or estimate based on known benefit formula. Plan 1 Plan 2 Total income from defined benefit plans STEP 3. Estimate annual retirement income from Social Security. Use calculator at to estimate in future dollars. STEP 4. Calculate retirement income shortfall. (1e 2 3) STEP 5. Estimate total retirement wealth needed. a. Retirement wealth factor: (from Figure 14-2, assuming years in retirement and % average investment return) b. Retirement income shortfall Retirement wealth factor STEP 6. Estimate retirement savings goal a. Value of current retirement savings accounts b. Future value of current accounts ( 6a FVIFi,n) c. Retirement savings goal (5b 6b) STEP 7. Estimate monthly savings required to meet savings goal. (Use time value of money calculation for payment.)
  20. 20. baj01275_app_433-454 02/09/2007 17:10PM Page 452 EPG_Team-C 105:JWQD032:bajapp: 452 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 17 Life Insurance Needs Analysis Yourself Your Spouse A. Costs at Death 1. Uninsured medical expenses (deductible and copay) 2. Funeral expense (average $10,000, but less for cremation) 3. Settlement of estate (estimate 4% of assets) 4. State inheritance taxes (if any) 5. Counseling costs for adjustment to loss Total costs at death 1 2 3 4 5 B. Lump Sums 6. Outstanding debts a. Mortgage b. Car loan(s) c. Credit cards and other loans d. Total outstanding debt to repay 6a 6b 6c 7. Education costs for children or spouse (see Chapter 15) 8. Spouse retirement fund 9. Household emergency fund Monthly household expenses 3 Total lump sum needs 6d 7 8 9 C. Cost of Household Maintenance 10. Deceased annual after-tax income 11. Annual cost of lost support services (child/eldercare, housekeeping) 12. Reduction in family expenses due to death (estimated 20–25%) 13. Annual Social Security survivor benefits 14. Net income shortfall 10 11 12 13 Total household maintenance fund needs 14 x Number of years to replace years 15. Total fund needed (sum double-underlined values) D. Available Resources to Meet Needs 16. Total savings and investments 17. Group life insurance 18. Social Security lump sum benefit 19. Total resources to meet needs 16 17 18 Total life insurance needs 15 19
  21. 21. baj01275_app_433-454 02/09/2007 17:10PM Page 453 EPG_Team-C 105:JWQD032:bajapp: APPENDIX—PERSONAL FINANCE WORKSHEETS 453 WORKSHEET 18 Estate Tax Calculation 1. Calculate gross estate: Net worth Less assets excluded because of type of ownership or beneficiary designation: Assets transferred through family limited partnerships Life insurance held in irrevocable trusts Other irrevocable trust assets Gross estate 2. Calculate adjusted gross estate: Funeral expenses Executor’s fee Legal fees Court fees Estate administration fees Total estate expenses Adjusted gross estate Gross estate Estate expenses 3. Calculate taxable estate: Amount to spouse Amount to charity Total unlimited deductions Taxable estate Adjusted gross estate Unlimited deductions 4. Unified exemption ($1.5 million in 2005) Amount subject to tax Taxable estate Exemption
  22. 22. baj01275_app_433-454 02/09/2007 17:10PM Page 454 EPG_Team-C 105:JWQD032:bajapp: 454 APPENDIX—PERSONAL FINANCE WORKSHEETS WORKSHEET 19 Comparison Shopping for Auto Insurance In comparison shopping for property and liability insurance, it’s important to provide the same information to each potential insurer so that your quotes will be comparable. Automobile Vehicle characteristics (year, make, model) Insured characteristics (age, sex, driving record, full-time or occasional driver) Potential discounts (good student, driver education) Company Name Agent’s name Address Phone Policy term (6 or 12 months) Total premium Liability coverage Per person Per accident Property Deductibles Collision Comprehensive Medical payments Per person Uninsured motorist Per person Per accident Other coverage Other factors to consider (e.g., multiple policy discounts, insurer reputation)