Individual assignment for FIN533

Family’s financial planning (20%)

a) Biodata of the family (not limit to):

 occupation
 the number of people living in the house
 type of house, cars, other assets, etc
 relationship to you
 you may also want to include some photos, pictures, graphical illustration etc
 any other information deemed relevant
 FAMILY FINANCIAL PLANNING OF
MADAM ZACHERY AND FAMILY

ACKNOWLEDGEMENT...........................3

BIOGRAPHY OF THE FAMILY...............4

FINANCIAL INFORMATION...................6

MONTHLY EXPENSES............................8

BALANCE SHEET STATEMENT............9

CASH FLOW STATEMENT....................11

RATIOS.....................................................13

INCOME TAX YEAR ASSESSMENT 2021 15

COMMENT AND ADVISE......................16

APPENDIXES...........................................19
REFERENCES 20
 ACKNOWLEDGEMENT

First and foremost, praises and thank you to the God, the Almighty, for His blessings for
me to complete the assignment given by our lecturer.

I would like to express my gratitude to my lecturer, ……………….. because of her

patience while guiding and acknowledge me to complete the assignment. His/her guidance really
helps me to succeed and complete this assignment within the time given. I also want to express
my gratitude to my husband, En. Mohd Adam for his contribution to help me complete the
assignment. Without his contribution, it will be difficult for me to complete the assignment
within the time given.

Lastly, I also want to thanks to my family, my kids and friends for their motivation,
advices, support and encouragement during completing this assignment. Their supports and
encouragement are really help me. Since that, I am motivated and I did complete the assignment
successfully.
 BIOGRAPHY OF THE FAMILY

For this individual assignment for FIN533, I have been assigned to make financial planning
for a family and I chose my own family to do the financial planning. I, Madam Zachery
Yusof is currently a private sector’s employee which her company is located at Cyberjaya,
Selangor. She is 38 years old and married to Mr. Adam who is a successful business man.
Basically, this family consist of 6 members. The first child of her is Amri, 26 years
old married to a nurse, already ended of his full-time studies in Bachelor of Business
Administration (Hons) Finance at UITM Lendu, few years ago. The second and third child
of her are Anis, 23 years old, a pharmacist, and Arinah, 21 years old who have just
graduated from Universiti Kebangsaan Malaya, after ended her Foundation Studies in
Science. All of them are successfully ended their studies during their younger ages.
Madam Zachery earns RM 5,500 salary with few bonus per month. In the middle of
May, En. Mohd Sabri have received half of his fund’s savings in EPF as much as RM
70,000. She had been living in an inheritance house of his late father at Bukit Mahkota,
Selangor. Madam Zachery also owns her family car a Nissan Almera and also Ducati
 motorcycle for his husband to go work. All the vehicles already have been fully paid. As for
Ducati, it is purchased by cash because En. Adam got some extra money from his late
father’s will. Other assets that Madam Zachary owned are furniture, jewelleries and on
August, she purchased an Apple laptop which has cost RM 2500. Madam Zachary also
makes an investment in Tabung Haji and EPF contribution.

FINANCIAL INFORMATION

Details RM

Monthly salaries 5,500

Bonus per year 300

Madam Zachary’s own wages per month 850

Cash in hand 300

Madam Zacahry’s savings account 5,000

Madam Zachary 's savings account 4,600

Received half of EPF's fund 70,000

Market value of inheritance house 500,000

Market value of Nissan Elmira (2010) 35,800
Market value of Ducati V1 69,800

EPF balance as at 31 Dec 2021 80,000

Tabung Haji balance as at 31 Dec 2021 35,000

Current value of furniture 10,000

Current value of jewelleries (20g x 239.79) 4,796

Astro bill outstanding 110

Borrowed from a friend due May 2021 300

Personal loan balance 40,500

Personal loan monthly installment 1,125

Monthly utilities bill 500

Monthly groceries 700

Monthly parent's allowance 700

Monthly TM Unifi bill 89

Arinah’s utility fees 100

Monthly fuel and toll expenses 300

Monthly dining 200

Monthly Anis' university’s fees 2,500

Monthly astro bill 61.32

Monthly children's school expenses 208

Car maintenance 300

Car insurance and road tax 1,400

Motor's insurance and road tax 400

Family vacation 1,500

Annual zakat and EPF's zakat 3,400

Annual income tax 1,400

Clothing expenses 500

Monthly donation 50

Monthly EPF contribution 605

Munirah's university expenses 500

Purchased HP Laptop on August 2021 3,500

Monthly leisure and miscellaneous expenses 300

Family medical expenses 300

 MONTHLY EXPENSES

Monthly
Expenses
JAN FEB MA APR MA JUN JUL AU SEP OCT NOV DEC
Deta R Y G
ils RM RM RM RM RM RM RM RM RM RM RM RM
Utilities bill expenses 500 500 500 500 500 500 500 500 500 500 500 500
Groceries expenses 300 300 300 300 300 300 300 300 300 300 300 300
Parent's allowance 300 300 300 300 300 300 300 300 300 300 300 300
TM Unifi bill 89 89 89 89 89 89 89 89 89 89 89 89
Hostel management fees for 100 100 100 100 100 100 100 100 100 100 100
Anis
Fuel and toll expenses 300 300 300 300 300 300 300 300 300 300 300 300
Dining expenses 200 200 200 200 200 200 200 200 200 200 200 200
Children's bus fees 130 130 130 130 130 130 130 130 130 130 130
Astro bill expenses 61.32 61.32 61.32 61.32 61.32 61.32 122.64 122.64 61.32 61.32
Children's monthly expenses 208 208 208 208 208 208
at home
Car maintenance 2,000 500
Car insurance and road tax 2,000
Motor insurance and road tax 1000
Family vacation 1,500
Annual zakat and EPF's zakat 3,400
Annual income tax 1,400
Clothing expenses 500
Donation expenses 50 50 50 50 50 50 50 50 50 50 50 50
EPF contribution 605 605 605 605 605 605 605 605 605 605 605 605
Purchased HP Laptop 2,500
Monthly leisure and 300 300 300 300 300 300 300 300 300 300 300 300
miscellaneous expenses
Arinah's university expenses 500
Family medical expenses 300
Personal loan monthly 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125
installment
Borrowed from a friend due 300
Dec 2021
 BALANCE SHEET STATEMENT

En. Mohd Sabri and Family

Balance Sheet as at 31 December
2020
RM RM
Liquid Asset Non-Current Liabilities
Cash in hand 500 Personal loan balance 40,500
Madam Zachary savings account 30,000
Mr Adam’s saving's account 54,600

Lifestyle Assets Current Liabilities

Market value of inheritance house 500,000 Astro bill outstanding 123
Borrowed from a friend due Dec 2020 500
Market value of Nissan Elmira (2010) 35,800
Market value of Ducati V1 69,800
Current value of furniture 10,000
Current value of jewelleries 4,796
Purchased HP Laptop (current value) 2,500

Investment Assets
EPF balance as at 31 Dec 80,000
2020
Tabung Haji balance as at 31 Dec 2020 35,000 Total Liabilities 41,123
Net Worth 781,873
Total Assets 822,996 Total Liabilities and Net Worth 822,996
 Regarding on the balance sheet as at 31 December 2021, Madam Zachary and family
have total assets as much as RM 822,996 which is quite high. The liquid assets are on cash in
hand and Madam Zachary and Mr. Adam’s savings account are RM 9900 in total. Next, the
lifestyle assets that Madam Zachary owns 1 car which is Nissan Almera which she had fully paid
long years ago. While Mr. Adam also has a motorcycle which is super Ducati V1 which also
fully paid few years ago. Furthermore, Madam Zachary also got the inheritance house from her
late father which cost RM 500,000 at market value. Moreover, Madam Zachary also owned
furnitures that cost RM 10,000 and her daughters also owned jewelleries as much as 20 gram
which cost RM 4,796 at current value. This year, in May, Madam Zachary had purchased a HP
Laptop that cost RM3,500 at current value. For investment, Madam Zachary used EPF
contribution and Tabung Haji as her place to invest his money. These assets are important
because these assets could be benefit to the family in the future and could be the emergency fund
when something unwanted happen.

The current liabilities are Astro bill outstanding which the amount is RM 123 and
borrowed from a friend due mid of 2021 as much as RM 300 and already paid within this year
because current liabilities duration to be paid is not more than one year. Madam Zachary has
only a current liability which is personal loan and the balance is RM 40,500. Madam Zachary
make this loan in the year of 2018 and the total loan with 7% interest rate is RM 67,500.

Personal Loan
Total loan RM 67,500
Interest rate 7%
Tenure 5 years
Total installment RM 13,500
Total monthly installment RM 1,125
Total loan balance RM 40,500
Total tenure balance 3 years
 CASH FLOW OF STATEMENT

En. Mohd Sabri and Family

Cash Flow Statement for the year ended 31
December 2020
RM R
M
Cash Inflows
Monthly Salaries (5,500 x 12) 66,000
Madam Zachary own savings (850 x 12) 10,200
Other income :
Bonus per year (300 x 12) 3,600
Received half of EPF's fund 70,000
149,800
Total Cash Inflows
Cash Outflows
Personal loan monthly installement (1,125 x 12) 13,500
Monthly utilities bills (500 x 12) 6,000
Monthly groceries (300 x 12) 3,600
Monthly parent's allowance (300 x 12) 3,600
Monthly TM Unifi bills (89 X 12) 1,068
Arinahr's monthly facial maintenance (100 x 11) 1,100
Monthly fuel and toll expenses (300 x 12) 3,600
Monthly dining (200 x 12) 2,400
Children's bus fees (130 x 11) 1,430
Monthly Astro bills 736
Arinahs monthly maintenance expenses (208 x 12) 1,248
Car maintenance (250 x 2 x 2 ) 1,000
Car insurance and road tax 1,400
Motor insurance and road tax 400
Family vacation 1,500
Annual zakat and EPF's zakat 3,400
Annual income tax 1,400
Clothing expenses 500
Monthly EPF contribution 7,260
Monthly donation (500 x 12) 6,000
Arinah's university expenses 500
Purchased HP Laptop on May 2021 2,500
Monthly leisure and miscellaneous expenses (300 x 12) 3,600
Family medical expenses 300
Total Cash Outflows 68,042
Total Cash Flows 81,758
 Regarding on the cash flow statement for the year ended 31 December 2020, the income
of Madam Zachary’s monthly salaries, her bonus per year and Mr’ Adam’s wages per month.
Moreover, for this year, Madam Zachary had received half of her EPF’s fund as much as RM
70,000. Diagram 1 below shows the expenses that this family spent within this year. As the
pandemic of COVID-19 continuing until the end of this year, some of the expenses such as
children’s school expenses decreased unlike any other year.

MADAM ZACHARY AND FAMILY' S EXPENSES

16,000

13,500
14,000

12,000

8,000 7,260
6,000
6,000 6,000
3,6003,60 3,600 3,400 3,600
4,000 0
1,0681,10 2,4001,430736 1,500 1,400 2,500
0 400 500 300
2,000 500

Diagram 1
 RATIOS

Asset Liquidity

i. Liquid asset to take-home pay ratio

Liquid assets / Take-home pay x 100
= [cash in hand + Madam Zachary saving’s account + Mr. Adam saving’s account]

/ [Income – Income tax]

= (300 + 5,000 + 4,600) / (66,000 – 1,400)

= 9,900 / 64,600

= 15.33% @ 1.84 months

The family’s liquidity condition is bad because it is not between 25% - 50% range
and 3 or 6 months. Madam Zachary must achieve liquid assets between 25% - 50% or
3 or 6 months in order to be on the safe side.

ii. Current ratio

Liquid assets / current liabilities

= [Cash in hand + Madam Zachary saving’s account + Mr. Adam saving’s account]

/ [Astro bill outstanding + Borrowed from a friend due December 2020]

= (300 + 5,000 + 4,600) / (123 + 500)

= 9,900 / 623

= 15.89 times @ RM 15.89

The ratio is more than 1 which portrays Madam Zachary has high liquidity position
to pay short term obligations.

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 13

iii. Debt ratio

(Total liabilities / Total assets) x 100

= (41,123 / 673,995) x 100

= 6.10%

Madam Zachary’s debt ratio is less than 30% which he will not face any difficulties
in getting new loans because the ability to pay debt increased.

iv. Debt service coverage ratio

(Income – Income tax) / Personal loan monthly installment

= (66,000 – 1,400) / 13,500

= 4.79 times @ RM 4.79

The ratio is more than 1 which portrays the family’s ability to meet their current debt
obligation. The higher the ratio, the better because it means the family has the ability
to make payments of debt.

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 14

 INCOME TAX ASSESSMENT

Madam Zachary and family Tax Return for the year of

assessment 2021
RM RM
Aggregate income:
Monthly salaries (5,500 x 12) 66000
Bonus per year (300 x 12) 3600
Total aggregate income 69600
(-) Monthly donation (50 x 12) -600
69000
(-) Reliefs
Individual 9000
Wife 4000
Children:
Munirah studied in Degree at UITM Puncak Alam 8000
Mukhlissah studied in secondary school 2000
Murzaliffah studied in secondary school 2000
Muzamir studies in primary school 2000
EPF contribution 7000
Parent 1500
Lifestyle (HP Laptop + Internet) 2500
Total Reliefs -38000
Chargeable income 31000
Income tax computation:
On the first 20,000 150
On the next (11,000 x 3%) 330
Total income tax 480

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 15

(-) Rebates:
Self (1<35,000) 400
Wife 400
Zakat 3400
Total Rebates -4200
Total tax charged -3720
(-) Monthly tax deduction (116.65 x 12) -1400
Tax paid in excess -1400

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 16

 COMMENTS AND ADVICES

Referring to the statement above, Madam Zachery have assets or savings where the
amount is high to cover the liabilities that the family borrow which is total of the assets is RM
673,995 while the total of the liabilities is RM 41,123. With the amount stated in the balance
sheet and the percentages of ratios, there is no problem for Madam Zachery to pay her debt
obligations such as current liabilities and non-current liabilities and she also have the chances to
make another loan because the ability for her to pay the debt increased. Madam Zachery also can
make another investment other than Tabung Haji and EPF contributions to gain more savings in
the future. Next, the net worth of this family is RM 632,872 which the assets are more than the
liabilities and this family have extra saving if some emergencies happen.

Based on the cash flow statement above, Madam Zachery and family experiences some
savings because the total income is bigger than the total expenses in which the amount savings is
RM 81,758. Fortunately, Madam Zachery also earned bonus per year as much as RM 3,600 and
half of her EPF’s fund savings which the amount is RM 70,000 as her family savings other than
her salary and Mr. Adam wages. However, it is quite a concern that this family’s expenses are
quite high despite they have sum of money that they could save. Madam Zachery apparently
spend more in utilities bills which is RM 500 per month and could reduce the usage of electricity
and water. Moreover, Madam Zachery also could reduce the expenses on leisure and
miscellaneous down to RM 200 monthly. Besides that, the youngest child of Madam Zachery are
still studying, but because of unfortunate event such as the pandemic of COVID-19 happen,
Madam Zachary could save a little from the expenses spent on them. This can free up a bit of
Madam Zachary’s budget and save more for the future.

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 17

Insurance Planning

Insurance planning is important part of financial planning and also parts of today’s life.
Nowadays, insurance become one of need as it gives many benefits such as protects from having
difficulties and short of money if something unwanted happen. It is found that Madam Zachary
did not provide any insurance for herself and her family. The insurance that is suggested for
Madam Zachary and her family for her to take in the future are the basic one, such as life
insurance and medical insurance. For life insurance, it provides financially for Madam Zachary
loved ones if one day she is going to retire or unable to work anymore. With having this
insurance, it enables them to continue enjoying a comfortable lifestyle with minimum worry. As
for medical insurance, it helps Madam Zachary and family to pay the bills if they develop some
certain illnesses or suffer from injury or disability or admitted in the hospital. Furthermore, as for
the children who is still studying and Madam Zachary who almost want to retire, this family
also can take education and retirement insurance. This type of insurance, it enables overseas
education for her children or a comfortable standard of living during her retirement days. Besides
that, Madam Zachary also can use SSPN for her children who are under 29 years old for many
benefits.

Investment Planning

Investment planning is the main component of financial planning. Investment planning is

the process of identifying financial goals and converting them through building a plan.
(Eleanmarkets, 2020). Other than savings, Madam Zachary should invest her money to get return
for future planning. Thus, an increase in assets can lead to an increase in net worth. With the
stated information in balance sheet statement, it is found that Madam Zachary make an
investment in EPF contribution and Tabung Haji. The amount savings in EPF contribution is RM
80,000 while in Tabung Haji is RM 35,000. As for Tabung Haji, there is no limit how much we
want to invest. In the future, for this family continue their living without much worry, it is

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 18

enough with EPF contribution and Tabung Haji as the investment assets.

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 19

Retirement Planning

Retirement planning is the process of determining retirement income goals and the
actions and decisions necessary to achieve those goals. Retirement planning includes identifying
sources of increase, estimating expenses, implementing a savings program and managing assets
and risk. (Kagan, Retirement Planning Definition, 2020). Madam Zachary who is working in
private sector only depending on Employees Provident Fund (EPF) which contributed 11% of
her monthly salaries. Madam Zachary should rethink about to retire early or not to adjust her
financial planning in the future. As for the suggestion, Madam Zachary should contribute in
Private Retirement Scheme (PRS) for further investment in retirement years. In addition, Madam
Zachary can take moderate fund option as she is between 40 – 50 years old range. With this
retirement planning, it is enough for Madam Zachary and family in the future after the retirement
of her.

Estate Planning

Estate planning is the preparation of tasks that serve to manage an individual’s asset base
on the event of incapable or death. The planning includes the assets of the heirs and the
settlement of estate taxes. (Kagan, Estate Planning Definition, 2020). En. Mohd Sabri and family
have comprised everything his owned such as liquid assets, lifestyle assets, investments and
liabilities are all part of his estate. All of the estate is under his name and her husband, Encik
Adam. In the future, Madam Zachary and her husband need to ensure that the estate owned will
be leave to the right beneficiaries. Besides that, Madam Zachary always need to update her will
because the estate will change from time to time. Wills is important because it will avoid
difficulties and disagreement between the beneficiaries which is her children.

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 20

 APPENDICES

Figure 2: Ducati

Figure 1: Nissan Elmira

Figure 3: Electricity biils Figure 4: water bills

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 21

 REFERENCES

Car Market Value Guide. (n.d.). Retrieved from CarBase.My:

https://www.carbase.my/tool/car- market-value-guide
Eleanmarkets. (2020, November 18). Investment Planning.
Retrieved from elean markets:
https://www.elearnmarkets.com/blog/investment-planning/
Kagan, J. (2020, July 30). Estate Planning Definition. Retrieved from
Investopedia.com:
https://www.investopedia.com/terms/e/estateplanning.asp#:~:text=
Estate%20planning%2 0is%20the%20preparation,attorney
%20experienced%20in%20estate%20law.
Kagan, J. (2020, November 10). Retirement Planning Definition.
Retrieved from Investopedia.com:
https://www.investopedia.com/terms/r/retirement-
planning.asp
Kalkulator Zakat KWSP. (n.d). Retrieved from Pusat
Pungutan Zakat-MAIWP:
https://www.zakat2u.com.my/kiraan/zakat/kwsp
Nota Penerangan BE 2019. (n.d). Retrieved from LHDN Malaysia:
http://lampiran1.hasil.gov.my/pdf/pdfam/Nota_Penerangan_BE_1.pdf
Personal Loans. (n.d). Retrieved from Maybank2U:
https://www.maybank2u.com.my/maybank2u/malaysia/en/personal/
loans/personal_loan_ listing.page
Private Retirement Scheme. (n.d). Retrieved from Private
Pension Administrator: https://www.ppa.my/

Why Do I Need Insurance? (n.d). Retrieved from Great Eastern Life:

https://www.greateasternlife.com/my/en/personal-insurance/unde
rstand-insurance/why- insurance.html

FINANCIAL PLANNING OF MADAM ZACHERY PAGE 22