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Week 7 Assignment
Noemia Burley
ECO110
Professor Isaac Boring ("Professor B")
August 18, 2024
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Developing Your Personal Financial Plan
Productivity Plan
I would start by defining specific financial goals, like saving a particular amount of
money for a down payment on a house, in order to create a financial plan utilizing the SMART
model. Subsequently, I would establish a timeline and ascertain the precise quantity required to
achieve these goals. The goals that I need to achieve need to be measurable. By taking into
account my present income and expenses and making any required adjustments to make them
practical, I would make sure the goals are attainable and can be achieved on timely by creating
deadlines to monitor progress and maintain motivation. Lastly, it is important to ensure that they
are relevant to my overall financial well-being.
Financial Savings Goal and Time Frame
My financial goal is to save $20,000 for a down payment to buy a house over a time
frame of three years. In order to secure a mortgage, lower the loan-to-value ratio, and maybe
lower my monthly payments and interest rates, I decided to save $20,000 for a down payment on
a home over the course of three years. The savings target is more feasible when it is spread out
over three years, which enables me to regularly put money aside without jeopardizing my other
financial commitments.
Since my three-year time frame and $20,000 savings goal match my income and
expenses, I think they're reasonable and will still allow me to save a sizable amount without
going over my budget. For example, I budgeted $6,667 each year for the down payment, which
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remains after necessary costs such as utilities, rent, and taxes. My strategy is to prioritize
expenses like rent and auto loans, but I also save a portion for retirement to guarantee that I can
continue to contribute to my savings goal without jeopardizing my stability. With this well-
rounded strategy, I can reach my savings goal within the allotted time.
Housing Choice
My housing choice is to rent a two-bedroom house with $15,000 yearly rent ($1,250
monthly). I decided to rent a two-bedroom property for $15,000 a year because it strikes a
compromise between space and affordability, enabling me to save for my $20,000 down
payment and maintain a nice living environment. My monthly rent of $1,250 is manageable,
giving me enough money for other necessities and regular contributions to my savings target. I
can keep myself on pace to meet my financial goal in three years by selecting a rental that is
fairly priced and avoiding housing overspending.
Non-Rent Expenditures
In terms of non-rent expenses, I allocated a reasonable amount for personal care,
entertainment, and other miscellaneous items, but I gave priority to necessities like food, gas, and
utilities. I set aside $2,500 for food so I could eat healthily without going overboard, and $1,200
for gas so I could get where I needed to go. I live a balanced lifestyle without jeopardizing my
funds by keeping personal care and entertainment costs modest at $800 and $1,000, respectively.
I'm able to save $6,667 a year and still cover my daily expenses because to these well-thought-
out allocations, which will help me save the $20,000 I need for a down payment on a house
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within the allotted three years. I can avoid squandering money and maintain the integrity of my
financial plan thanks to this methodical technique.
Reflection on Productivity Planning
My personal financial plan and budget were made possible by a step-by-step productivity
strategy, which gave me a methodical and structured way to handle my money. By segmenting
the process into smaller, more doable activities, including figuring out my fixed costs, making
savings plans, and allocating money for non-essential spending, I was able to concentrate on
every part of my budget without getting overwhelmed. The whole plan became more realistic
and attainable as a result of my meticulous approach, which made sure I prioritized my savings
goal while accounting for all necessary expenses. I was able to develop a balanced budget that
meets my financial goals in the allotted time by methodically following the instructions.
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Sources
