Financial Plan Instructions 02

Financial Plan Instructions 02

Current Situation

I reside in Sydney working as a financial analyst at an investment firm. Over the past five years I have been able to focus on accumulation of a number of assets namely a mortgage for a three bed-roomed apartment, a 10-year maturity bond and savings amounting to an estimated AUD$36,650. I currently pay an estimated AUD$1,650 monthly for my mortgage, which I expect to complete in the next 11 years.

Goals and Objectives

My primary objective is to gain financial independence before I achieve the age of 35, which only be made possible if I focus on accumulation of adequate savings to make new investments and more clearing my outstanding debt for my mortgage.

Reducing Expenses

Financial Strategy


Plan Of Action





Current situation – your age, where you reside, study and work status, current assets and liabilities, income and your current expenses (from expense-tracker), insurance, wills etc. Putting this information is bullet-point format or a table is a good idea.

  1. Goals and objectives – a list of short, medium and long-term life and financial goals that are specific, measurable and achievable. It is preferable to set dates for each of your goals. An example of a goal might be, “To buy a Town House in SW Sydney for approximately $350,000 by 1/7/20XX”. Goals should be descriptions on what you would like to have achieved by a certain date. They can be either financial milestones or lifestyle goals. Remember that your goals should be S.M.A.R.T. which stands for ‘specific’, ‘measurable’, ‘achievable’, ‘resourced’ and ‘time-specific’. This section should not include detailed descriptions of how to achieve a goal (which should be covered in the Financial Strategy section later). For instance, “starting a savings plan” is not a goal but a financial strategy. The goal might be “to accumulate $50,000 deposit for my first home by 1/7/20XX”. In that case, the savings plan would be a strategy to achieve that goal. Where possible, you should justify your goals with financial calculations.
  2. Reducing expenses – identify some specific options to reduce your total living expenses by ten percent. The purpose of this is to brainstorm (creatively) some alternatives to reduce expenses and to free up some savings to achieve your goals. I recognise that some students may find this more difficult than others. However, it is important to be creative and consider various alternatives for reducing expenses (whether or not you plan to do so).



  1. Financial strategy – a detailed list of strategies for achieving your life and financial goals using the principles outlined in this course. This is the most important part of your financial plan. It should demonstrate a deep understanding of the course and an ability to specifically apply it to your situation and goals. It should also be the longest section of your plan (at least 5 pages) and should go into a lot of detail. There should be elements of your plan that cover both your student life and your expected life after graduation. The relative proportion that you allocate to each should be appropriate according to how close you are to graduation. If you plan to live overseas, then you are welcome to customise the strategies to what is appropriate for that country. If you are uncertain of what you will do after you graduate then you should base it on the ‘most likely’ scenario.

You should include the following sub-sections:

o Income: Your strategy for steadily building your income over the next ten years through both your salary and investments. This may include your plans for matching your career to both your personality type and what skills are in demand in the economy. You should also discuss how you plan to develop your skills over time and reduce the risk of any prolonged periods of unemployment. You can also briefly identify how any investment strategies (discussed later) will add to your income.

o Expenses: How you plan to manage your living expenses so that you can consistently save towards your long term goals. It’s a good idea to specify target total monthly living expenses here as a percentage of income and then detail those expenses in your budget (next section).

o Savings: Regular savings plans that you need to establish for your various goals and objectives. When will you start and finish saving? How much will you save each month? You should use financial calculations to justify your strategy.

o Investments: How will you invest your various savings? Cash investments, fixed interest, shares, investment properties, managed funds etc? What specific product(s) are most appropriate to your situation? Show evidence of some research here and be specific! How are the products appropriate for your tolerance of risk and your investment time horizon?

o Superannuation: What do you plan to do with your current superannuation account(s)? If you don’t have an account, which one will you use when you first start working? Why? Which investment option will you select? If you plan on moving overseas then you should do some research on the retirement savings system in that country and include some details here (they are usually called ‘pension systems’ overseas rather than ‘superannuation’).

o Taxation: Any legitimate strategies that you plan to implement to make sure that you don’t ‘over-pay’ tax.

o Insurance: What do you plan to do with life insurance, health insurance, travel insurance and general insurance (house and motor vehicle) over the next five to ten years? Be specific.



o Estate planning: How will you draft your will? Who will be executor? Who will be the beneficiaries? If you don’t have one already, how will you go about arranging for a valid will?


You should also include the names of specific products that you have researched and may use (however, please do not copy and paste information from product websites about these products into your plan or an Appendix).

  1. Budget – your planned average monthly expenses (by category) for the next year. If you are close to graduating then it is probably also a good idea to create a separate budget for after graduation (you may need to make assumptions about your situation at that point in time). It is a good idea to use the expenses that you recorded over this session as a basis for constructing this budget.
  2. Plan of Action – a specific list of tasks to implement your strategy with deadline dates for them to be achieved. This is like a one-page “task list” with tick boxes that you can put up on the refrigerator for implementing your chosen strategies. This section may repeat some elements of your ‘Financial Strategy’ section and can be laid out using a bullet-point or check-box format. However, the key difference is that the plan of action is a brief one-page task list of things that you must do to implement your strategy (1 page) while the financial strategy section provides detailed information about the strategies themselves (5+ pages).





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