FINA605 Personal Finance Report

Instructions:

You are required to address the following questions using this template (type in the boxes provided; submissions not using this template will NOT be accepted). You can complete the questions with your own information, but with permission from your workshop supervisor you may use information from another person from whom you have written permission (consent).

Refer to the Assessment Rubric for the marking breakdown. If you have any question, please discuss with your tutor during the weekly workshops. Please note the clarification due dates stated on top of this page.

Personal Finance

Report 1

I. Financial Personality

Identification (word limit: maximum 200 words)

Visit the Sorted website (sorted.org.nz) and take the money personality quiz (under “Tool” menu of the website). Identify your financial personality (reference your Sorted survey).

Describe the top three key characteristics of this financial personality. Use an example to elaborate how these key characteristics influence the way you make financial decisions.
Who has most influenced your financial personality? Discuss the lessons that they imparted to you, the positive and/or negative lessons. Give examples.

Present your answer here:

Click or tap here to enter text.

（i）My money personality is Money maestro,它有以下三个主要特征：1.我可以在一个地方投入大量资金并在其他地方节省大量资金2.我倾向于屈服于大量的奢侈消费，因为我喜欢生活中的美好事物以及它们所创造的轻松3.喜欢在社交和物质财富上花钱。举例来说，我不愿意买很贵的衣服或者昂贵的电子产品，但当我去迪士尼游乐园的时候，我愿意花钱买VIP票，这样可以省去大量的派对时间，可以保证我的舒适性。我也愿意为我的同行伙伴购买午餐，让我们的关系变得更好，我认为把钱花在社交方面是值得的。

（ii）我的父亲对我的财务个性影响最大，我的父亲在我的印象中一直不愿意买昂贵的衣服，但是他对身边的同事很大方，经常请客吃饭，他和同事的关系很好，这使得他在公司中升职的频率要比别人高。

Reflection (word limit: maximum 300 words)

Discuss whether you are a spender or a saver, how much attention you give your finances, and do you consider yourself to be a risk avoider or risk taker? Align this with the financial personality identified above.
What was your last major purchase? Answer the following questions in reference to this purchase:
Describe the process you went through in making this purchase.
Was this a planned purchase or an impulse purchase? Identify if this purchase was for a need or a want?
Did you do a lot of investigation before you made the purchase? If so, discuss those activities. If not, explain why you chose not to do so.
Did you consider the impact that the purchase would have on your financial situation? If so, briefly state your considerations. If not, briefly explain why not.
If you had a chance to make the purchase decision again, would you still purchase this item? Why or why not?

Present your answer here:

Click or tap here to enter text.

我认为我是一个节俭的人，在日常生活中我会避免非必要的花销，我会定期检查我的财务账单以确保我的每一笔花费都是必要的，我认为我自己是risk avoider，我在已知风险的情况下偏好较低回报，而不是在未知的情况下偏好较高回报。就算我有能力在股票方面做的很好，我也不会冒风险去承担未知的风险，这和我的财务人格是有关系的，只有当我明确这样花钱是一定有回报的时候，我才愿意去投入金钱。例如我知道花钱请朋友吃饭可以获得更好的人际关系。
我最后一次购买的主要物品是iPhone13
我去商场里的手机专卖店购买，并且对比了其他型号的手机以及价格。
这是有计划地购买，购买是处于需要的，因为旧手机损坏了很长一段时间，不换新手机我就不能联系到身边的人
在购买之前我做了调查，我在网上对比了不同型号，不同牌子的手机有什么区别，价格范围，最后我才确定我需要的手机是哪一款。
我考虑过对我财务状况会产生怎样的影响，我会想这一笔支出是否会影响到我购买其他必要产品的预算，是否会对我的生活质量有影响。
如果有机会再做一次购买决定，我会买这件商品，因为不换新手机我就不能联系到我身边的人，新手机是必要的。

II. Current Position (word limit: maximum 300 words)

Spending

Log into your online banking and download your last 3 months’ bank statements. Use the account/s you do most of your spending from and include your credit cards.
Copy your 3 months’ transactions into Excel or use your banking app/online features.
Categorize each transaction using the Category Examples provided in Appendix 1.
Use Excel to:
Calculate your spending breakdown as a percentage of total spending;
Prepare a table or chart that depicts the percentages of your spending breakdown (by categories).
Prepare a table or chart that depicts the percentages of your spending breakdown by necessity and discretionary (discretionary spending is unnecessary spending that is not required to ‘live’).
Present (copy and paste) the table and/or chart you created in Excel in Tables 1A and 1B of this template.

Address the following questions:

Did you make more than you spent? Include relevant figures in your answer.
How much (proportion or percentage) of your spending is discretionary (discretionary spending is unnecessary spending that is not required to ‘live’)? Are you satisfied with the proportion on discretionary spending? Why or why not?
What surprised you most about your spending habits? If you were to make a change in your spending habits, what would it be? Use a specific example to clearly illustrate your point.

Present your answer here:

Click or tap here to enter text.

[Insert here: Breakdown of Spending — Tables 1A, 1B and 1C; Label the table/chart as appropriate.]

In Table 1A, display Appendix 1 with relevant items and figures.
In Table 1B, display a table and/or a chart that depicts the percentages or proportions of your spending breakdown by categories. Label the table/chart as appropriate.
In Table 1C, display a table and/or a chart that depicts the percentages or proportions your spending breakdown by necessity and discretionary. Label the table/chart as appropriate.

Net worth

Calculate your net worth by identifying the value of your assets and your liabilities.
Estimate the value of your assets including clothes, books, etc.
Put a breakdown of your assets and liabilities into Table 2.

Address the following questions:

What is your net worth?
How much do you have available as cash and savings?
Based on your spending identified above, how much would you need to have in savings to last 12 weeks without any income? Discuss how many weeks you could survive without income based on your necessary spending. Justify this with calculations using relevant figures presented in your Spending and Net worth from above.

Present your answer here:

Click or tap here to enter text.

[Insert here:] Table 2: Net Worth

[In a Table present your assets, liabilities and equity as support for your net worth calculation.]

III. Debt (word limit: maximum 300 words)

Comment on your attitude towards having personal debt. In this course we learned that having a mortgage can be considered a smart debt.

Select and answer only ONE of the two options:

Option 1 (Choose this option if you have debt, including a student loan):

Refer to Part B and identify the debts you have, including your percentage of dumb vs smart debt.
State how you are currently paying this off and its characteristics (including interest rate, term and whether you are making the minimum repayment or additional repayments).
Given your calculations in previous part, specify when you can fully pay off your debt.
What changes can you make to pay off your debt sooner? Clearly demonstrate using relevant figures.

Note: If your only debt is a student loan, estimate a realistic graduating salary using the salary guide on careers.govt.nz and calculate your repayments based on the thresholds stated on the IRD website. Include any other assumptions you make.

(Show all calculations in Table 3. Discussions should be presented in the space indicated below).

[Insert here:] Table 3: Debt Calculations

[Clearly present your debt calculations.]

Option 2 (Choose this option if you currently have no debt):

If you have no debt, assume that you are planning to take a mortgage to buy a house in 5 years.

State an estimated price of a house that you will buy in 5 years and the amount of mortgage (80% of house price) you plan to take on. [Note: If this timeframe is not realistic for you, specify a timeframe that is more realistic for you. Explicitly state any assumption on your future salaries. Explain why your estimated salaries are realistic.]
Assuming that you can get a mortgage interest rate of 4.5% fixed rate per annum for 30 years, calculate the periodic repayment required for your mortgage if you repay this loan every fortnightly.
Comment if the above arrangement would be feasible for you. In reference to Parts (i) and (ii) above, what changes (in terms of time period to buying the house, house price, and loan period) would you make to better suit your personal financial position? Briefly explain. Include in your discussion how you intend to save up the 20% for the deposit.

(Show all calculations in Table 3. Discussions should be presented in the space indicated below).

Clearly specify the option chosen (Option 1 or Option 2). Present your answer here:

Click or tap here to enter text.

[Insert here:] Table 3: Mortgage Calculations

************

Reference List

Use APA referencing for ALL external sources and concepts learnt in class, or readings.

Appendix 1: Category Examples

Below is a list of possible expenses. Please ensure that you include any that are not mentioned. Please do not include any that do not apply to you.

IncomeWagesStudent AllowanceStudent LoanInterest Housing ExpensesRentMortgage PaymentsRatesMaintenance and Repairs UtilitiesPowerPhoneInternetWater Consumer DebtCredit CardHire PurchasePersonal Loan Food and GroceriesGroceriesEating OutCoffee/Drinks

TransportTaxiParking Public Transport Car ExpensesWarrant of FitnessRegistrationPetrolMaintenance and Repairs Bank FeesAccount feesCard Fees Other Expenses Health careSubscriptions Memberships Gifts TithesCharityPet ExpensesInsurance Textbooks