Personal Finance

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CONDUCTING A PERSONAL FINANCIAL ANALYSIS

Overview

Conducting a personal financial analysis is one way to check your progress toward your financial goals and see how well you have stayed on track with your finances over a period of time. Using technology can help you stay organized throughout your analysis, as well as help you visualize financial data. Visual data display will enable you to observe general trends in your personal finances and communicate them effectively.

For this assignment, you will be using Excel to analyze and display personal financial data. You can also apply the approach to learning and working with Excel software in this course when using other technology tools in your life and career.

Practice the technology skill and build your confidence by conducting a personal financial analysis using Excel to organize three monthly budgets and visualize this financial data using graphs or charts. You will discuss the results of your financial analysis in the provided Word template, including progress toward your selected financial goal from your Week 5 Assignment.

Preparation

Read the following scenario to understand the context for this assignment. Read the Week 7 Assignment Excel Template [XLSX] and the Week 7 Assignment Word Template [DOCX]. These completed templates will be your deliverables for this assignment. Make sure you have populated all sections of the Excel template and are providing at least one paragraph of 4–7 sentences per section in the Word template.

Scenario

Three months have passed since you created your initial financial plan (for the Week 5 Assignment). A friend who is studying to become a financial advisor recommends that you check your progress toward your savings goal. She volunteers to help you conduct a financial analysis of your personal budget over three months. You meet with your friend each month to go over your analysis. Through her studies, she’s learned that people understand budget concepts better when they are represented as visuals, so she asks you to create some.

For this assignment, you will make three monthly budgets. Your income increases each month. The formulas for these increases have been placed in cells H7 and M7 of the Week 7 Assignment Excel Template [XLSX]. Additionally, in the Month 2 Budget and the Month 3 Budget, cells H16 and M12 have been populated with a formula to represent an unexpected expense in that category for the month. Do not modify these cells. For Months 2 and 3, you will need to reallocate your budget around your increased income and unplanned expenses.

Instructions

Using what you have learned about budgeting, Excel, and creating data visualizations, complete the Week 7 Assignment Excel Template [XLSX]e. Then complete the Week 7 Assignment Word Template [DOCX] to explain and reflect on the process and results of your personal financial analysis. Remember to turn in both completed templates when finished.

For this assignment, complete the following steps:

  1. Create a personal financial analysis with three monthly budgets and progress toward a savings goal.
    • Use the Week 7 Assignment Excel Template [XLSX] for Steps 1 and 2. Consider the income and expenditures from the Week 5 Assignment to use as your starting point for your Month 1 Budget. Then complete the budgets and the savings goal progress table in the template.
    • You will also notice an increase of 400 dollars in your Health Care expenditure in Month 2 as the result of a medical emergency, as well as a 325-dollar increase in your Transportation expenditures in Month 3 due to an unplanned repair expense.
    • Remember, since this is a monthly budget, you will need to divide all of the values from your Week 5 assignment annual plan by 12. After you have done this, you will notice that embedded formulas show that your income increases in Months 2 and 3 because you received additional unexpected income from other sources.
  2. Create appropriate graphs to illustrate the findings of a personal financial analysis.
    • Create three appropriate graphs or charts (one per month) in Excel to show the findings of your personal financial analysis. Each should show how you have allocated your income among the various categories. Additionally, create a graph that shows your progress toward your savings goal based on the information you input into the Financial Goal Savings Progress table. Choose the type of graph that you think would best illustrate your progress.
  3. Explain how selected graphs are the best choice to communicate financial information.
    • In the Week 7 Assignment Word Template [DOCX], explain why you chose these particular graphs or charts. How do the graphs or charts you created help someone understand the financial data?
  4. Explain the results of a personal financial analysis, including overall progress toward savings goals, potential budget adjustments, and possible economic or life impacts that may affect the budget in the coming year.
    • Look at the results of your financial analysis and explain your key findings. These should include overall progress toward savings goals, potential budget adjustments, and possible economic or life impacts that could have implications for your budget in the coming year.
    • Compare the different types of debt so you can identify the debts that are the costliest to carry. Show your calculations and explain why paying down these debts would help you to save faster.
  5. Project how the financial analysis will look in one year.
    • Think about a year from now (that is, your Month 3 Budget) and predict what your financial state might reasonably look like. Make sure you consider potential changes with economic implications such as income growth and inflation of consumer prices. Identify ways you might save more money.
  6. Articulate meaning relevant to the main topic, scope, and purpose of the prompt.
    • Review your assignment to ensure your written responses are relevant, clear, and thoroughly address the prompts in the template.

Remember to submit both the completed Week 7 Assignment Excel Template and Week 7 Assignment Word Template for this assignment.

Additional Requirements

  • Written communication: Communicate in a manner that is scholarly, professional, respectful, and consistent with expectations for professional practice in education. Original work and critical thinking are required regarding your assignment and scholarly writing. Your writing must be free of errors that detract from the overall message.
  • Font and font size: Times New Roman, 12 points.
  • Sources: Two sources are required. One of these sources can be one of the course readings or videos. The second source must be obtained from the Capella library databases. Remember to cite your sources using an appropriate scholarly style.