appendix—personal finance worksheets

APPENDIX—PERSONALFINANCE WORKSHEETS

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434 APPENDIX—PERSONAL FINANCE WORKSHEETS

Financial Record Specific Items SafeGeneral Category Within Category Filed Lockbox Deposit

Auto Insurance policyTitle informationRepairs/expensesAuto loan/lease information

Bank Checking statements and recordsSavings statements and records

Credit Records for each loan or credit accountCredit reportsApplications for credit

Home Mortgage documents and recordsHomeowner’s insuranceReceipts for repairs/capital improvementsRental contracts

Children Report cardsSchool photosSchool policies/procedures manualRecords of child-care expensesBirth/adoption certificates

Life /estate Life insurance policiesBilling recordsCopy of willsCopy of estate plan

Medical Billing and insurance recordsPrescription drug recordsHealth insurance policyHealth/immunization records

Employee benefits Periodic reports from retirement plansEmployer informationOther insurance and benefits

Taxes Tax statements from employer(s)Tax statements from investments and loansTax returnsReceipts for next tax year

Budget and bills Current bills payableBill receiptsBudget records

Investments Records of purchases and salesAccount activity statements

WORKSHEET 1 Organizing Your Financial Records


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 $Savings accountsMoney market accountsU.S. savings bondsCash value of life insuranceOther short-term

investments

Total liquid assets

CarsHome furnishingsJewelry/art/collectiblesClothing/personal assets

Total personal property

Market value ofinvestments (stocks,bonds, mutual funds)

Employer retirementplan(s)

Individual retirementaccount(s)

Other retirement savings

College savings plan

Other savings plans

Total investment assets

Market value of home

Market value of investmentreal estate

Total real property

Total assets

Current bills1. $

2.

3.

Total current bills

Credit card balances (list)1. 2. 3.

Alimony/child supportowed

Taxes owed (above with-holding)

Personal loans

Car loans

Total short-term debts

Home mortgage balance

Home equity loans

Other real estate loans

Student loans

Other investment loans

Other liabilities/debts

Total long-term debts

Total debts



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 toMonthly December 31

Salary/wageincome (gross)

Interest/dividendIncomeOther income

(self-employment)Rental income

(after expenses)Cash from sale

of assetsStudent loans

ScholarshipsOther incomeGiftsTotal CashInflows

January 1 toMonthly December 31

Income andpayroll taxes

GroceriesHousingMortgage or rentProperty taxInsuranceMaintenance/

repairsUtilities

HeatingElectricWater and sewerCable/phone/satellite

Car loanpayments

Car maintenance/gas

Credit cardpayments

Other loanpayments

Other taxesInsurance

LifeHealthAutoDisabilityOther insurance

ClothingGiftsOther consumer

goodsChild-care

expenses

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WORKSHEET 3 Personal Cash Flow Statement (cont.)

Sports-relatedexpenses

Health club duesUninsured

medical expensesEducationVacations and

travelEntertainmentAlimony/child

supportCharitable

contributionsRequired pension

contributionsMagazine sub-

scriptions/booksOther payments/

expensesTotal cashoutflows



WORKSHEET 4 Spending Log

Directions: Copy this worksheet and use it to keep careful track of all your expendituresfor one or more weeks.

Monday Tuesday Wednesday

Description $ Description $ Description $

Thursday Friday Saturday/Sunday

Description $ Description $ Description $



WORKSHEET 5 Personal Financial Ratios

Directions: Use your personal financial statements to calculate your personal financialratios. Record them on this worksheet, critically evaluate your current financialsituation, identify areas to work on, and reevaluate periodically to track your progress.

Personal Financial Criteria __/__/__ __/__/__ __/__/__

Net worth

Net cash flow

Liquidity ratioLiquid assets

� Monthly expenses

Debt ratioTotal debt

� Total assets

Debt payment ratioTotal monthly debt payments

� After-tax monthly income

Mortgage debt service ratioMonthly mortgage debt service

� Gross monthly income

Savings ratioMonthly savings

� After-tax income

Overall evaluation of current finances:

Specific areas that I need to work on:



WORKSHEET 6 Household Credit Summary

Most RecentInterest 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



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:

CapacityWage, salary, and other income sufficient to

make paymentsAffordable current monthly payment obligations

CapitalPositive net worth, appropriate for life-cycle stage

CollateralValuable assets in addition to income

(checking, savings, investment accounts)Adequate collateral for loan (if applicable)

CharacterPrevious experience with creditPast credit history indicates a good attitude

toward repaying debtsNo history of bankruptcyStable employment and residency

ConditionsJob and employer securityGeneral economic conditions favorable

Plan for improving creditworthiness:



WORKSHEET 8 Automobile Costs Log Sheet

Lease/ Tolls Repairs Loan Auto and and Registration Monthly

Date Payment Fuel Insurance Parking Maintenance and License TotalJanuary

February

March

April

May

June



WORKSHEET 8 Automobile Costs Log Sheet (cont.)

Lease/ Tolls Repairs Loan Auto and and Registration Monthly

Date Payment Fuel Insurance Parking Maintenance and License TotalJuly

August

September

October

November

December



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



WORKSHEET 10 Lease Versus Buy—Automobile

Cost of Leasing

Capitalized cost reduction and security deposit

Foregone interest on capitalized costreduction 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


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)




WORKSHEET 12 Calculating Affordable Home Price

STEP 1.Monthly amount you can allocate to total housing costs

STEP 2.a. Expected cost of property taxesb. Expected cost of homeowner’s insurancec. Expected cost of repairs and maintenanced. Expected cost of association duese. 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 availableb. Gifts from parents or othersc. Expected closing costsd. Maximum house you can afford (� 3c � 4a � 4b � 4c)



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 AlternativesA B C

Company nameFund objectivePrice per shareNet asset valueMinimum initial purchaseMinimum additional purchase

Past performance1-year3-year5-year

ExpensesFront-end loadBack-end loadExpense ratio

Fund manager tenureServices

Auto deductionAuto reinvestmentTransfer between fundsIRAsOnline access

RatingsAgencyAgency



WORKSHEET 14 Mutual Fund Tracker

Mutual Mutual Mutual Mutual Mutual Mutual TotalFund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Portfolio

Fund name

Fund family

Investmentobjectives

Portfoliocomposition

Industry orsector

Net assetvalue

Price pershare

Numberpurchased

Front-endload paid

Total initialinvestment

Date Market or Net Asset Values



WORKSHEET 15 Retirement Goals

Directions:For each of the following retirement goals, indicate its importance to you by checkingthe appropriate box.

Very Somewhat Not At AllRetirement Goal Important Important Important

Economic securityMaintain standard of livingImprove standard of livingFinancial independenceAfford to keep home

FamilyBequests to heirsCollege costsSupport children or parentsContinue family business

MedicalCover health-care costs

ExtrasBetter/more vacationsIncreased hobby costsContributions to charity

Other



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 expensesRetirement savingsHousing expenses

Total reductionsPossible increases: Health care�insurance

Leisure activitiesGifts�donations

Total increasesc. 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 benefitretirement plan(s).Use most recent statement from your pension sponsoror estimate based on known benefit formula.

Plan 1Plan 2

Total income from defined benefit plans �

STEP 3. Estimate annual retirement income from Social Security.Use calculator at www.ssa.gov 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 goala. 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.)



WORKSHEET 17 Life Insurance Needs Analysis

Yourself Your SpouseA. 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 Sums6. Outstanding debts

a. Mortgageb. Car loan(s)c. Credit cards and other loansd. Total outstanding debt to repay 6a � 6b � 6c

7. Education costs for children or spouse (see Chapter 15)8. Spouse retirement fund9. Household emergency fund

Monthly household expenses � 3Total lump sum needs 6d � 7 � 8 � 9

C. Cost of Household Maintenance10. Deceased annual after-tax income11. 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 benefits14. Net income shortfall 10 � 11 � 12 � 13Total 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 Needs16. Total savings and investments17. Group life insurance18. Social Security lump sum benefit19. Total resources to meet needs 16 � 17 � 18

Total life insurance needs 15 � 19



WORKSHEET 18 Estate Tax Calculation

1. Calculate gross estate:Net worthLess assets excluded because oftype of ownership or beneficiarydesignation:Assets transferred through family limited partnershipsLife insurance held in irrevocable trustsOther irrevocable trust assets

Gross estate

2. Calculate adjusted gross estate:Funeral expensesExecutor’s feeLegal feesCourt feesEstate administration feesTotal estate expenses

Adjusted gross estate � Gross estate � Estate expenses

3. Calculate taxable estate:Amount to spouseAmount to charityTotal unlimited deductions

Taxable estate � Adjusted gross estate � Unlimited deductions

4. Unified exemption ($1.5 million in 2005)Amount subject to tax � Taxable estate � Exemption



WORKSHEET 19 Comparison Shopping for Auto Insurance

In comparison shopping for property and liability insurance, it’s important to providethe same information to each potential insurer so that your quotes will be comparable.

AutomobileVehicle 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 nameAddressPhone

Policy term (6 or 12 months)

Total premium

Liability coveragePer personPer accident Property

DeductiblesCollisionComprehensive

Medical paymentsPer person

Uninsured motoristPer personPer accident

Other coverage

Other factors toconsider (e.g., multiplepolicy discounts, insurerreputation)


appendix—personal finance worksheets

Economy & Finance

records savings statements

personal financial statements

pm page

cash value of life insurance

records creditrecords

personal financial criteria

employers tax statements

benefits taxes tax statements