ECO110

Assignment 2 Financial Plan Explanation Word Template

Questions

1. Identify the savings goal and the time frame you determined to reach your

goal. Why is the time frame you identified realistic?

Organizational commitment is a crucial element depicting the productivity of a firm. Job

satisfaction contributes significantly to job satisfaction. Without a feeling of satisfaction with the

job one is doing, it becomes challenging to develop loyalty to the firm. This eventually impacts

the productivity of the firm. That is the reason for moving from my current job is needed. As

such, saving enough money to get a down payment of $40,000 to buy a house is my goal. I have

set out a timeframe of five years to have accomplished this goal. It means that I will be saving

$8,000 annually for five years. Setting realistic goals is essential. The goals should not negatively

impact other activities. As such, the set time frame will help me save enough while still doing

other activities requiring money.

2. Explain why you chose the housing option you did and how it will help

you achieve your selected financial goal.

At the moment, I chose a housing option that is affordable and cheap. I needed to cut

down my spending and limit my housing plan to a cheaper option. By doing this, I will be

motivated to work towards the set goal, which is to buy a house of my own. I chose to rent a

room that shall be costing $9,000 annually. Before coming to this decision, there were some

considerations I made. These considerations include:

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I. Time frame for saving goals- Every goal needs the consideration of a realistic

time frame. I do not intend to have an expensive housing plan at the moment. This

is because, in five years, I set to have owned my house. As such, in the period of

the set time frame, I will be able to cut down my housing plan expense, while

saving for my goal and doing other activities.

II. Familiar situations- Before deciding on renting a room for $9,000yearly, I had

done some consulting. In the consulting process, I met a friend who had a similar

plan for ten years and ended up saving for his car. I decided to employ the same

concept since, from consultations, I realized it is worthy.

III. Quality of life- I did not much consider the quality of life while deciding to rent

the room. This is because I set to have a better and quality life when I finally my

house. I am young, and as such, quality life at the moment is not a priority.

IV. Trade-off decisions- With my income of $50,000 wholly budgeted, I had to have

another source of revenue. As such, I decided to trade-off my car (an old

Volkswagen) to a taxi company for one year. In return, I would be getting a free

ride to and from my work for one year. That way, I will be able to reduce the

transportation expenses, which I will channel into other activities.

V. Other considerations- Before renting the room, I had to consider the location of

the place. More so, I needed a full-time connection to the internet due to top the

nature of my work. Other than location and connectivity, I also considered the

security of the place.

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3. Explain your choices for non-rent expenditures and how they will help

achieve your savings goal within the time frame.

Alignment of the expenditures with the financial helps in facilitating overall growth

strategy. I needed to align my expenditures with my financial plan. This is because I do not only

intend to save for a house. This means that I also have some other goals to achieve, only that

buying a house is a priority. The alignment will get me in realizing the expenditures I can cut or

reduce. For instance, renting a room for $9,000 yearly was a critical decision. Other than having

many expenses on a house plan, which is my set goal, I had to cut down the current housing plan

to support other short-term goals. Similarly, Trading-off my old Volkswagen with a taxi company

will help me reduce transportation costs. My transport costs are $1,000 yearly. In five years, I

will have spent $5,000 on transport. However, I made the trade-off crucial in ensuring that I have

an extra revenue of $1,000 since I will not have to pay any transport for the first year. This

amount shall be used in facilitating other short-term goals that I have to achieve within the five

years of savings.

4. Reflect on the productivity strategies you used to break down your

financial plan into smaller steps to help you stay organized and productive.

A financial plan requires discipline, especially when it comes to saving. A common

challenge is deciding on how to break down the financial plan. This was a problem I

encountered. Without a good set-up structure, I found it hard to follow the earlier plan. However,

this was before consultation and learned about prioritizing. As such, I wrote down all my

priorities, goals, and dreams. This way, I was able to create a feasible financial plan based on

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priorities. The plan I have designed is to help me achieve my priority goal, which is buying a

house. Therefore, I set up my priorities targets. The prioritization of my targets has helped me

decide on what expense to reduce to achieve my savings plan.

Setting up of priority target goal is a critical element in setting up financial plans. It has

facilitated me with the knowledge of how to manage my spending. This is one of the best

productivity strategies that I have learned. It has more efficient and effective results in achieving

both long-term and short-term goals.

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