future planning · web view650.75 victoria after tax income 534.5 total income 1,185.25 expenses...

FutURE pLANNING

James and Victoria

Personal Weekly BudgetJames and Victoria

Figures Taken from 21/10/2016 $ $Income James After Tax Income 543.4 Victoria After Tax Income 534.5 Dividends Revenue 5.50

Total Income 1,083.40

Expenses Essential Expenses Rent 285 Interest Expense 10.72

Loan Repayments266.6

3 Food and Groceries 200 Electricity and Gas Bill 19.38 Gas 14.31 Household Services and Operations 27.69 Clothing And Footwear 50 Personal Care 30 903.73Communication Mobile Phone 18.46 Landline 19.62 38.08Transport Fuel 34.55 Tyres 3.44 Service/Repairs 26.61

Vehicle Registration 26.04 90.63

Total Essential Expenses 1,032.4

4 Non-Essential Expenses Cosmetic Grooming 60 Luxury Clothing 100 Alcoholic Beverages 50

Miscellaneous Goods and Services 50 260

Recreation

Fitness 29.9 29.9

Entertainment Broadband Internet 18.46 Foxtel Subscription 13.85 Movies 107.8

Eating Out 112 252.11

Total Non-Essential Expenses 542.01

Total Expenses 1,574.45

Weekly Deficiency 491.05

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Cost Of Lifestyle

Cost Of Lifestyle

To live the same lifestyle for next 25 years, have to have saved $638365

Positives

Spending $25534.6 a year, not sustainable if future plans of purchasing a house.

Stable income

James and Victoria's Wages

JamesVictoria

Hours Worked 43 38Overtime 5 0Pay Rate 14.3 14.07Overtime Pay Rate 21.45 21.10

Total650.7

5 534.5

James is able to work overtime in his job, allowing for more cash flow resulting in a larger amount of savings.

James shares in Amcor and have you both have begun to save money

James and VictoryPersonal Balance Sheet

As at 21/10/2016 Assets Current Assets Cosmetic Accessories 400 Clothing 1000 Mobile Phones 1778 Land-line 82.5 James Savings 1500 Victoria’s Savings 1200 Total Current Assets 5,960.50 Non-Current Assets Car - Suzuki Swift 12000 Car - Honda Civic 4999 Computer Setup 1200 Sound System 500 Television 995

Laptop 1698 Total Non-Current Assets 21,392.00 Investments & Income Producing Assets Shares in Amcor 7490 Superannuation 21299.30 Total Investments & Income Producing Assets Total Assets 27,352.50 Liabilities Current Liabilities Victoria’s Credit Card 2800 Total Current Liabilities 2,800.00 Non-Current Liabilities Bank Loan - Suzuki Swift 12000 Total Non-Current Liabilities 12,000.00 Total Liabilities 14,800.00 Total Net Worth 12,552.50

Financial worth is decent for some of your age. However, with my recommendations you could be in a much better position

Negatives


Figures Taken from 21/10/2016 $ $Income James After Tax Income 543.4 Victoria After Tax Income 534.5 Dividends Revenue 5.50 Total Income $ 1,083.40 Expenses Essential Expenses Rent 285 Interest Expense 10.72

Loan Repayments266.6

3 Food and Groceries 200 Electricity and Gas Bill 19.38 Gas 14.31 Household Services and 27.69

OperationsClothing And Footwear 50 Personal Care 30 903.73Communication Mobile Phone 18.46 Landline 19.62 38.08Transport Fuel 34.55 Tyres 3.44 Service/Repairs 26.61 Insurance Vehicle Registration 26.04 90.63Total Essential Expenses $ 1,032.44 Non-Essential Expenses Cosmetic Grooming 60 Luxury Clothing 100 Alcoholic Beverages 50 Miscellaneous Goods and Services 50 260Recreation Fitness 29.9 29.9Entertainment Broadband Internet 18.46 Foxtel Subscription 13.85 Movies 107.8 Eating Out 112 252.11Total Non-Essential Expenses $ 542.01 Total Expenses $ 1,574.45 Weekly Deficency $ 491.05

Yellow – Needs to be cut back

The first being household services and operations – This is not really a necessary expense, this cost can be cut down by manually cleaning the house and doing your own laundry will drastically improve your savings.

Mobile Phone - costs can be cut down by transferring to Amaysim, they are offering an unlimited talk and text plan for $24.90 per month.

Luxury clothing and Cosmetic grooming– This is not sustainable to continually spend $160 on luxury clothing and cosmetic grooming every week, this excessive spending should be limited to once a month, instead of weekly.

Alcoholic Beverages – Alcoholic beverages are not cheap, and continually buying alcohol every week is an extremely expensive. If alcohol is a must in your lifestyle consider limiting yourself to buying alcohol when it is on special. Reducing the amount that you spend on alcohol.

Movies & Foxtel – Going out to see a movie is very pricey, being most often $54 per movie seen, going twice a week is extremely detrimental to saving. Foxtel is also an overpriced TV channel, I would suggest a Netflix account, it is a cheaper alternative to both Foxtel and the movies, you will be able to drastically cut down your expenses, removing both Foxtel and Movies from your cash budget. With Netflix being $15 a month.

Eating out – Eating out is unsustainable in your cash budget, to effectively save money going out to eat needs to be cut down. The average eating out costs around $28 per person. There are two alternatives to this, either cook at home, with the average meal costing around $5 per person. However, if eating out is an essential to your lifestyle then you can reduce the amount that you spend going out, instead of ordering desert and appetizers just order a main meal and a drink.

Transportation Expenses – This expense can be halved if both of you take the same car to go to and from work, instead of taking your own cars, having two cars doubles your expenses unnecessarily.

Fitness – This Gym membership can be cancelled by going out and running for cardio instead of paying for a gym membership this will increase the amount.

Orange - Can be bundled together to reduce costsLand line and broadband internet – This is another plan that can be bundled together, most provider will bundle landline and broadband internet, therefore by selecting an updated plan, you can reduce the cost that you are paying for both expenses. Iprimus is offering an unlimited landline and broadband plan for $79.99 a month.

How you are purchasing your items

High interest credit cards are a bad option; you will struggle to pay off the credit card only paying interest.

GoalsWithin the first year

Pay off Victoria’s car loan and pay off her credit card

Achieved by selling Victoria’s car – two cars aren’t a necessity

This $8000 will pay off Victoria’s credit card of $2800.

James shares in Amcor will also be sold, as of October the 21th the shares are worth $14.89, the yearly dividend revenue is only $286.2.

Selling all of the shares will total to $7445.

The remaining of Victoria’s car’s debt will be paid off using $1000 of James saving’s and the last $755 being used to pay off using Victoria’s savings

After the expenses are changed your weekly cash budget should look like this


Figures Taken from 21/10/2016 $ $Income

James After Tax Income650.7

5 Victoria After Tax Income 534.5 Total Income 1,185.25 Expenses Essential Expenses Rent 285 Food and Groceries 250 Electricity and Gas Bill 19.38 Gas 14.31 Clothing And Footwear 50 Personal Care 30 648.69 Communication Mobile Phone 11.49 Landline and Broadband 18.46 29.95Transport Fuel 16.02 Tyres 1.68 Service/Repairs 11.11 Registration 13.02 41.83

Total Essential Expenses 720.48

Non-Essential Expenses Luxury Clothing 23.08 Alcoholic Beverages 11.54 Miscellaneous Goods and Services 50.00 84.62Entertainment Netflix 3.46 3.46

Total Non-Essential Expenses 88.08

Total Expenses 808.55

Weekly Savings 376.70

By following my recommendations on your spending habits you will have already achieved my second goal

Save an emergency fund of $10000

A part of my budget plan requires you to open an account with Bankwest Hero saver, it has a variable interest rate of 2.65%

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Savings In First Year

Savings In First Year

Totalling to $28658.96 In the first year, with my revised plan

The last goal which needs to achieved within the first year is to find both of you a new job, one which reaches the minimum wage. I have found Victoria a job which may be suited, sales administrator/business systems manager, which has a median income of $52500, taking out tax would net income of $47945.21.

I have also found a new job for James a department manager which has a median income of $55000, taking out tax it would become $50228.31.


Figures Taken from 21/10/2016 $ $Income

James After Tax Income 965.93

Victoria After Tax Income 922.02


Expenses Essential Expenses Rent 285 Food and Groceries 250 Electricity and Gas Bill 19.38 Gas 14.31 Clothing And Footwear 50 Personal Care 30 648.69Communication Mobile Phone 11.49 Landline and Broadband 18.46 29.95Transport Fuel 16.02 Tyres 1.68 Service/Repairs 11.11 Registration 13.02 48.81Total Essential Expenses 727.46Non-Essential Expenses Luxury Clothing 23.08 Alcoholic Beverages 11.54 Miscellaneous Goods and Services 50 84.62Entertainment Netflix 3.46 3.46Total Non-Essential Expenses 88.08Total Expenses 815.54

Weekly Savings 1,072.42

$950 will be put into the high interest savings account $120 will be put into a misc. spending account

After the first year your balance sheet would look like this


As at 21/10/2017Assets Current Assets Cosmetic Accessories 600 Clothing and footwear 3600 Mobile Phones 1778 Land-line 82.5

James and Victoria's Savings 28658.96

Misc. Spending Account 3250

Total Current Assets 34,719.46

Non-Current Assets Car - Honda Civic 4999 Computer Setup 1200 Sound System 500 Television 995 Laptop 1698

Total Non-Current Assets 9,392.00

Investments & Income Producing Assets

Superannuation 30625.78

30625.78

Total Investments & Income Producing Assets

Total Assets 74,737.24

Liabilities Current Liabilities -Total Current Liabilities -Non-Current Liabilities -Total Non-Current Liabilities -Total Liabilities -

Total Net Worth 74,737.24

Medium term goals

Within the next 2-5 years, the medium term goals that I have set out for you have saved enough for a deposit for the house. With the median house price being $420000 and a 20% deposit, being $84000. If you have opened up the high interest account. After the second year if you have followed my cash budget you would have saved $107840.7, enough for the deposit on the house.

The repayments are $1969 a month. This will reduce overall weekly savings to $906.49. After this period only $800 will be deposited per month into the high interest savings account. The rest will be put into the everyday usage account.

The next medium term goal is for you to have saved enough money for the first year of supporting a child. With the average cost of a child being $812000. The first year cost of a baby will be around $45111.

After purchasing the house your weekly cash budget will look like


For 21/10/2018 $ $Income

James After Tax Income965.9

2

Victoria After Tax Income922.0

2


Expenses Essential Expenses

House Repayments454.3

8 Food and Groceries 250 Electricity and Gas Bill 19.38 Gas 14.31 Clothing And Footwear 50 Personal Care 30 818.08Communication Mobile Phone 11.49 Landline and Broadband 18.46 29.95Transport Fuel 16.02 Tyres 1.68 Service/Repairs 11.11 Registration 13.02 41.83Total Essential Expenses 889.86 Non-Essential Expenses Luxury Clothing 23.07 Alcoholic Beverages 11.53 Miscellaneous Goods and Services 50 84.61Entertainment Netflix 3.46 3.46Total Non-Essential Expenses 88.08 Total Expenses 977.94 Weekly Savings 910.01

After 5 years your balance sheet will look like this





Non-Current Assets Car - Honda Civic 4999 Computer Setup 1200 Sound System 500 Television 995 Laptop 1698 Total Non-Current Assets 9,392.00Investments & Income Producing Assets House 420000


77258.202



Liabilities Current Liabilities -Total Current Liabilities -Non-Current Liabilities Bank Loan 420000 Total Non-Current Liabilities 420,000Total Liabilities


Your Savings after 5 years would look like this

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Savings after 5 Years

Savings after 5 Years

The long-term goals that I have set out for you

Have allocated money to pay for your wedding the average cost being $65000

I have also allocated $50000 for the purchase of a new car, this will reduce the amount of savings to $855 a week

Personal Weekly Budget

James and VictoriaFor 21/10/2026 $ $Income

James After Tax Income 965.93

Victoria After Tax Income 922.02


Expenses Essential Expenses

House Repayments 454.38

Food and Groceries 250 Electricity and Gas Bill 19.38 Gas 14.31 Clothing And Footwear 50 Personal Care 30 818.07Communication Mobile Phone 11.49 Landline and Broadband 18.46 29.95Transport Fuel 37.19 Tyres 3.70 Service/Repairs 28.82 Registration 26.04 95.75Total Essential Expenses 943.77Non-Essential Expenses Luxury Clothing 23.08 Alcoholic Beverages 11.54 Miscellaneous Goods and Services 50 84.62Entertainment Netflix 3.46 3.46Total Non-Essential Expenses 88.08

Total Expenses 1031.85

Weekly Savings 856.10

The next goal that I have for you is after 10 years have saved enough for the first 5 years of looking after the baby, which will cost roughly $225555

After 10 Years Balance Sheet




Misc Spending Account 4000


Non-Current Assets Car - Honda Civic 4999 Car - Toyota Hilux 50000 Computer Setup 1200 Sound System 500 Television 995 Laptop 1698

Total Non-Current Assets 59,392.00

Investments & Income Producing Assets House 420000


123890.624



Liabilities Current Liabilities -Total Current Liabilities -Non-Current Liabilities Bank Loan 420000 Total Non-Current Liabilities 420,000Total Liabilities


Savings after 10 years

Savings0

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Savings After 10 Years

Savings After 10 Years

Savings into retirement

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Savings Until Retirement

In conclusion if you follow my cash budget plan, after going into retirement at the age of 65 years old, you would have own your home and have $2677821 to safely retire with. The average annual of cost for couples to live comfortably is $59160, you would have enough money to live comfortably until you were 110 years old. However, if you lived to 90 years old your children would have the house, the cars and potentially up to $1198821 to inherit.

future planning · web view650.75 victoria after tax income 534.5 total income 1,185.25 expenses...

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