Financial Ratios used to Your Life Situation
There is one project. It is expected that this project will be done in Microsoft Word and/or in conjunction with a Microsoft Excel spreadsheet. All written work must reflect the professional use of Standard American English grammar, spelling and punctuation. You must use your word processor’s spell check and “grammar check” functions to help you edit and proof read your work. The project is to be neat, in proper format and well organized. Points will be lost for messy projects. Always try to find a way to bring in creativity to your projects. Creative thinking will be rewarded.
The purpose of the project is to have you apply your finance education to a real world situation. Somehow, find a way to improve your financial situation. Discuss what in your financial life you want to improve and how you’re going to do it. You will need to include back-up data to support your solution. Prepare a written report of 3 – 4 pages.
This project is to help you out, so pick something that is of direct interest to you! Listed below are some ideas but you are not limited exclusively to this list. You are free to be creative.
1. Determine a Career Strategy…should you look at jobs in your field here in NH or would it be beneficial to look in another region? What would be the financial implications of moving and would it be worth it for the pay? Investigate salaries in your field and provide real data to back up your decision.
2. Determine your strategy to make a new big purchase, such as a car…would it make sense to lease or buy? Research and provide real data to support your decision. Provide different examples and the calculations that helped you arrive at your decision.
3. Maybe you’d like to start an investment account…look at the different options you have for investing and determine what kind of account you might open, what type of investments you might have at the age you are at, and what kind of money you may have 10, 20, 30 or more years from now if you started now! Use real data and calculations to determine what you would do given your options.
4. You’re never too young to start a retirement plan….have you started yet? Take a serious look at what you have put aside for retirement…or what you’d like to start putting aside. Develop a strategy to allow yourself to retire in comfort. Look at the benefits of IRA’s, Roth IRA’s, Variable Annuities, Keoghs etc. (One good way to start this project would be to contact a financial planner. Most banks offer the service free of charge!) Consider what it would take to retire at different ages (55, 60, 65) Build into your model a best case, worse case and middle case for interest rate earnings. (i.e. 8%, 10%, 12% interest earnings). Have fun with this!
5. If you are currently renting, determine what it would take to purchase a home. Would it be advantageous for you to do so? Don’t forget to take into account tax considerations. The purchase of a home almost certainly allows you to use schedule A to itemize expenses. (A real estate person could show you homes within your budget to make your dreams come true.) Consider different length mortgages and fixed versus variable rates.
6. Determine if it would be advantageous to refinance your home mortgage. Take into account tax considerations. (Contact banks and mortgage companies for competitive rates. Look at the difference in costs and programs) Consider different length loans.
7. Maybe you have too much debt and you’d like to put a plan in place to pay it off. Look at different ways, given you income and spending that you might be able to do that. Use real data and provide calculations and examples – then decide which one to implement.
8. Determine if you have the right amount of insurance coverage…there is a lot of information in several chapters on insurance…using real data research what coverage might be right for you, whether it’s Life, Health or car….again include data to back up your research and decisions.
These are just a few ideas…if you have something else, please send it to me by 4/5 or earlier and we can discus
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