Complete a financial analysis by creating three monthly budgets, tracking your progress toward your financial goal, and creating graphs to illustrate your budgets and savings progress. Explain why you chose the visualizations you did and the findings of your financial analysis.
Introduction
Note: Assessments 2 and 3 build on each other. Please complete Assessment 2 before completing Assessment 3.
Working for Your Future
It’s never too early to work toward the future you want to create. And that means not only planning for your professional future but also planning for what comes after. The sooner you become familiar with the best ways to save for retirement and start putting funds aside, the easier it will be to take control of when you stop working and ensure you have the means to live comfortably. A financial analysis can help you to track and plan your current and future investments.
This assessment you will leverage your technology and problem-solving skills to visualize data and convey solutions from your personal financial analysis. You can also use these same skills to help others visualize and understand data at home, work, and school. You may be surprised to discover just how much of your future depends on the decisions you make today.
Time Is Money
Even though he lived over 200 years ago, odds are Benjamin Franklin would be fascinated by how today’s financial habits have created an economy that supports the value of time. For example, instead of spending time shopping at the store, you can order pretty much anything on Amazon and have it delivered to your door in just a few days. Franklin might also agree that not all time is created equal. The time you spend with your family, for example, may be more valuable to you than the time you spend doing laundry. And because time (unlike money) is finite, it is, perhaps, the most valuable resource to use wisely throughout your life.
Understanding the value of your time can help you build your productivity skill. For example, creating an appropriate savings and investment plan can help you manage your time and reach your goals. When you apply the correct strategies to the right plan, you save yourself time and resources, which makes you more productive.
Data Visualization
Have you ever heard the saying “a picture is worth a thousand words?”
In the case of data, it’s true. Raw data are abstract and often difficult to interpret. By using charts and graphs to represent large amounts of financial information, you will give your data a structure that’s easier to understand and work with. And using a visual representation for data makes scientific sense as well. The way human beings process information is mostly visual. Charts and graphs allow us to visualize data and act on it more effectively than simply viewing it in spreadsheet form alone (Martineau & Cochin, 2003).
For example, maybe, you need to show your partner or children how you plan to increase your retirement contributions over time, demonstrate to your boss how one of your team members has improved their performance in sales, or show how many cookies your daughter’s Girl Scout troop has sold each year. No matter the situation, it’s more effective to present this information in visual form rather than handing people pages of numbers in a spreadsheet. By honing your problem-solving skill to analyze and represent your financial data, you’ll help yourself and others quickly grasp the most important takeaway from any dataset.
Data visualizations, such as charts or graphs, can also help you use the power of images to simplify your financial story for yourself by giving you a clearer picture of where you want to go. Graphs can quickly show you trends in spending on a month-to-month or year-to-year basis. Meanwhile, charts are great if you want to look at how different pieces of information fit together, like which candidates are most popular among voters.
To make your financial analysis work for you, you must think critically and leverage your problem-solving skill to determine the purpose you’re trying to achieve. Then you can utilize your technology skill to select the best way to visualize that information.
Whether you’re looking for answers about how to save for your future or just making sure you’re staying on track at work, using your problem-solving skill to visualize your data and convey the right information will help you ensure your decisions add up to the life you want to create.
Reference
Martineau, J., & Cochin, S. (2003). Visual perception in children: Human, animal, and virtual movement activates different cortical areas. International Journal of Psychology, 51(1), 37–44.
Note: Assessments 2 and 3 build on each other. Please complete Assessment 2 before completing Assessment 3.
Overview
One way to check your progress toward your financial goals is to conduct a personal financial analysis. This will help you see how well you have stayed on track with your finances over a period of time. Using technology can help you stay organized throughout your analysis, as well as help you visualize financial data. Displaying the data visually will allow you to observe general trends in your personal finances and to communicate about them effectively.
For this assessment, you will be using Excel as your technology tool to analyze personal financial data and display that data visually. There are many other technologies available for personal or professional use that can be used for this type of analysis. The approach to learning and working with Excel software in this course is one you can apply to other technology tools in your life and career.
Build your confidence and practice in the technology skill by conducting a personal financial analysis using a technology tool. You will use Excel to organize three monthly budgets and to visualize this financial data using graphs or charts. You will discuss the results of your financial analysis in the provided Word template, including progress toward your selected financial goal from Assessment 2.
Preparation
Read the scenario below to understand the context for this assessment. Review the Assessment 3 Excel Template [XLSX] and Assessment 3 Word Template [DOCX]. These completed templates will be your deliverables for this assessment. Make sure you have completed all sections of the Excel template and are providing at least one paragraph (4–7 sentences) per section in the Word template.
Scenario
Three months have passed since you created your initial financial plan (for Assessment 2). A friend who is studying to become a financial advisor recommends that you check in on your progress toward your savings goal. She volunteers to help you conduct a financial analysis of your personal budget over three months. You meet with your friend each month to go over your analysis. In her studies, she is learning that people understand budget concepts better when they are represented as visuals, so she asks you to create some.
In this assessment, you will make three monthly budgets. Your income increases each month, the formulas for these increases are already in cells H7 and M7 of the Assessment 3 Excel Template [XLSX]. Additionally, in the Month 2 Budget and the Month 3 Budget, some cells (H16 and M12) have been filled in with a formula to represent an unexpected expense in that expenditure category for the month.
Do not change these cells.
For months 2 and 3, you will need to reallocate your budget around your increased income and unplanned expenses.
Instructions
Using what you have learned about budgeting, Excel, and creating data visualizations, complete the Assessment 3 Excel Template [XLSX]. Then, complete the Assessment 3 Word Template [DOCX] to explain and reflect on the process and results of your personal financial analysis Remember to turn in both completed templates once you are finished.
For this assessment, complete the following steps:
Step 1: Use the Assessment 3 Excel Template [XLSX] to complete this and next step. Consider the income and expenditures from Assessment 2 to use as your starting point for your Month 1 Budget. Then complete the budgets and the savings goal progress table in the template.
Scoring guide criteria: Create a personal financial analysis with three monthly budgets and progress toward a savings goal.
Remember, since this is a monthly budget, you will need to divide all of the values from your Assessment 2 annual plan by 12. After you have done this, you will notice that embedded formulas show that your income increases in Months 2 and 3 because you received additional unexpected income from other sources.
You will also notice an increase of 400 dollars in your “Health Care” expenditure in Month 2 as the result of an unexpected medical emergency, as well as a 325-dollar increase in your “Transportation” expenditures in Month 3 because of an unplanned repair expense.
Step 2: Create three appropriate graphs or charts (one for each month) in Excel to show the findings of your personal financial analysis. Each should show how you have allocated your income among the various categories. Additionally, create a graph that shows your progress toward your savings goal based on the information you input into the Financial Goal Savings Progress table. Select the type of graph that you think would best illustrate your progress.
Scoring guide criteria: Create appropriate graphs to illustrate the findings of a personal financial analysis.
Step 3: In the Assessment 3 Word Template [DOCX], explain why you chose these particular graphs or charts. How do the graphs or charts you created help someone understand the financial data?
Scoring guide criteria: Explain how selected graphs are the best choice to communicate financial information.
Step 4: Look at the results of your financial analysis and explain your key findings. These should include overall progress toward savings goals, potential changes in your budget that can be made in the future, and possible economic or life impacts that may affect your budget in the coming year.
Scoring guide criteria: Explain the results of a personal financial analysis, including overall progress toward savings goals, potential changes in the budget that can be made in the future, and possible economic or life impacts that may affect the budget in the coming year.
Step 5: Think about a year from now (that is, your Month 3 Budget) and predict what your financial state might reasonably look like in the future. Make sure you take into account economic concepts such as potential income growth and inflation of consumer prices.
Scoring guide criteria: Project how the financial analysis will look in one year.
Step 6: Review your assessment to ensure that your written responses are relevant and clear and that you are thoroughly addressing the prompts in the template.
Scoring guide criteria: Articulate meaning relevant to the main topic, scope, and purpose of the prompt.
Remember, you need to submit both the completed Assessment 3 Excel Template and Assessment 3 Word Template for this assessment.
Additional Requirements
Your assessment should also follow the following requirements:
Written Communication: Communicate in a manner that is scholarly, professional, respectful, and consistent with expectations for professional practice in education. Original work and critical thinking are required regarding your assessment and scholarly writing. Your writing must be free of errors that detract from the overall message.
Font and font size: Times New Roman, 12 point.
Sources: Two sources are required. One of these sources can be one of the course readings or videos. The second source must be obtained from the Capella library databases. Remember to cite your sources using an appropriate scholarly style.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
Competency 1: Explain how economic principles impact aspects of personal and professional life.
Project how the financial analysis will look in one year.
Competency 3: Explain the findings of a personal financial analysis with regard to progress toward a financial goal.
Create a personal financial analysis with three monthly budgets and progress toward a savings goal.
Explain the results of a personal financial analysis, including overall progress toward savings goals, potential changes in the budget that can be made in the future, and possible economic or life impacts that may affect the budget in the coming year.
Competency 4: Create spreadsheets, charts, graphs, or other data visualizations to organize and present financial information.
Create appropriate graphs to illustrate the findings of a personal financial analysis.
Explain how selected graphs are the best choice to communicate financial information.
Competency 5: Develop professional written communication in a well-organized text, incorporating appropriate evidence and tone in grammatically sound sentences.
Articulate meaning relevant to the main topic, scope, and purpose of the prompt.
