personal finance

Financial Plan Project,Part V
Points:200

This part of the personal financial planningproject is where you put everything together. In this part you construct yourpersonal financial plan. Specifically address the following required elements:

• Complete a personal financial analysis of your situation, which includes personal financial statements (these can be the ones you submitted in Part I, updated).

• Use working knowledge of personal finance to construct a financial plan considering life-stage adjustments.
• Use technology to help establish a personal financial plan (describe what you used, why and how helpful it was, importance of protecting personal financial information).
• Examine financial resources to help you make financial decisions (explain your steps and what you examined).
• Identify your short-, intermediate-, and long-term financial goals.
• Explain your personal risk tolerance and how that impacts your financial plan.
• Explain your time horizon and how that impacts your financial plan.
• Construct a retirement plan as part of your personal financial plan (explain how time value of money impacts this part of the plan).
• Situations in our lives change all the time and our financial plan must adapt with us: requirements for items like insurance, retirement funds, credit management, taxes, and saving/investing; therefore, our financial plan needs to adjust through these changes.  Assume you are ten years away from retirement. What would your financial plan look like?  What adjustments do you need to consider between now and full retirement age?  Once you are retired and living on a fixed income, what adjustments will you have to make at that time? From where you are at this point in your life, how long can your funds last? Explain.
  
  

Following the 5-step critical thinking problemsolving process, determine what you would do in the situation outlined above:

Step 1: I IDENTIFY the Problemand Set Priorities
Step 2: D DEEPEN Understanding and Gather Relevant Information
Step 3: E ENUMERATE Options and Anticipate Consequences
Step 4: A ASSESS the Situation and Make a Preliminary Decision
Step 5: S SCRUTINIZE the Process and Self-Correct as Needed

Step 1: You are to identify your problem and set priorities.  As youbegin to examine the characteristics of the problem, you will be able to beginto clarify the priorities.  You need to describe the problem in at least aparagraph and establish priorities in a separate paragraph.  Along withthe problem, you need to write a problem statement.  A problem statementdescribes what is currently going on and why the problem needs to be resolved. You should include how long the problem has existed and what measurableitem(s) are affected. A problem statement is something that is written in theLean Six Sigma Process.  We wont spend time in this class learning thisprocess, but if you are interested in investigating Lean Six Sigma, click onthe following YouTube video on an introduction to Lean and Six Sigma concepts:

Step 2: For the 2^nd step of the critical thinking problem-solvingprocess, D, youwill deepen your understanding as you gather relevant information about yourown financial situation. As you deepen your understanding about any problemsyou may have, it will help you to determine what information might be relevantin coming up with a solution. Youneed to gather several reliable sources for this step. Listen to both sides both the pros and the cons before you evaluate the situation.  If newinformation arises about the companys problem(s), you need to consider thoseas well. Once it is time to evaluate, you need to do it with an open mind. set your biases aside as you move through this process.

Step 3: For Step 3 of the critical thinking problem-solving process, E,you will enumerate options and anticipate the consequences.  You need toenumerate (detail or list) genuine options because they will help you to focuson the possible consequences that could be likely to occur.  You need tobe very realistic in this stage.  Being practical or realistic will helpyou eliminate wasted time and energy.  Have the courage to ask the hardquestions even if they lead to additional problems. Be sure to include bothyour options and possible consequences in your summary.

Step 4: For Step 4, A, you will assess your financial situation andmake a preliminary decision.  By taking a good look at the entiresituation, you should be able to make a tentative decision that will help youdetermine what steps may need to be taken to resolve the problem.  You mayneed to seek informed and unbiased opinions/information from other sources. Youneed to treat all of the options equally before making your preliminarydecision.

Step 5: For the final step of the critical thinking problem-solvingprocess, S, you will scrutinize the process and self-correct as needed. 

    Scrutinizing the whole process enables usto see possible flaws and gaps in our thinking so that we can correct ourselvesbefore we make a mistake. In turn, self-correcting can lead us to necessaryreconsiderations of any aspect of our problem-solving process: We may realizethat we should reassess the nature of the problem, rework our priorities,gather more information, identify a new option, more carefully anticipatelikely consequences, reassess our expectations, and, in the end, make a betterdecision. This final step is our assurance that the problem has been resolvedsufficiently for the current time and circumstances. (Facione, Gittens p.47)

Be sure that you are reflecting on the entireprocess were you partial or fair-minded?  Did you look at both sides?Did you gather enough relevant information? Did you completely think throughthe entire process?  Did you make the best decision under thecircumstances? Did you make a timely decision? Are you willing to make adjustmentsor revise your decision if outcomes are not attained?