Planning Starts with the BasicsWritten by Jonathan Citrin
Planning Starts with BasicsWhen developing a plan for your finances, toughest question often is: “Where do I begin?” Before investing in stocks and bonds or buying life insurance, before implementing any change or making any decisions, you first need to analyze and understand your entire financial picture. Two documents allow you to do just that. A Balance Sheet and a Cash Flow Statement enable you to take an in-depth look at your current financial situation and make better decisions about future. With a little work, you can develop these two tools and be on your way to a solid plan for your finances. Balance Sheet A balance sheet is a snapshot of your personal finances at one point in time. It contains two main elements: what you own (assets), and what you owe (liabilities). Your net worth is expressed as: Net Worth = Assets – Liabilities. That is, what you own minus what you owe. A balance sheet clearly lists all assets and liabilities. Examples of assets include: house, investments such as stocks and bonds, savings and checking accounts, 401(k), IRAs, business interests, artwork, and jewelry, among others. Liabilities include mortgage balances, credit cards, education loans, and any other debt. Once you have created a list of everything you own and everything you owe, simply subtract sum of assets from sum of liabilities- this is your net worth. The ultimate goal of most investors is to increase their net worth. The balance sheet is a very useful tool to identify strengths and weaknesses in your current finances, as well as to determine your goals for future. Someone with a disproportionate amount of liabilities might set a goal to eliminate this debt. On other hand, someone with a positive net worth (more assets than liabilities) might plan to save and invest towards retirement, college, or another goal. Cash Flow Statement After analyzing your balance sheet and determining your goals, you need to decide how to fund these goals. A well formulated plan is one not only with realistic goals, but also a sensible means of achieving them. That is, having goals is good, but you must be able to pay for them. Using a cash flow statement will enable you to determine how to pay for your goals.
| | The Federal PLUS Loan ProgramWritten by Vanessa McHooley
The Federal PLUS Loan Program College is a time filled with important decisions and problems that must be solved in order to ensure your future and positive results at time of your college graduation. Everything from choosing a college to choosing your roommate to choosing your computer for college can rack your brain and make decisions that much harder. So, why not let one decision fall squarely on shoulders of your old standby? Your parents. With Federal PLUS Loan Program, your parents can help you to obtain loans that will put you through college. First Steps To Applying The first thing when thinking about applying for a Federal PLUS Loan is to do some research and understand exactly how a Federal PLUS Loan works. If you are a dependent and a future undergraduate student enrolled, at least, part-time at any college or university, you are eligible for a Federal PLUS Loan, whereby your parents can obtain a loan to help pay for your college expenses. In addition to these requirements, status of a PLUS loan also depends heavily upon your parents’ credit history. If they do not have a good credit history, chances are that your parents will not be approved for a Federal PLUS Loan.
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