PERSONAL FINANCIAL PLANNING (FIN 533)

FAMILY’S FINANCIAL PLANNING

PREPARED BY:

MUHAMMAD SHAFIQUL AQMAL BIN MOHD AZUAN

2023636994
BA2722C

PREPARED FOR:

NOR AIZAN BT MOHAMED

SUBMISSION DATE:
11 DECEMBER 2023
Table of Contents

1.0 INTRODUCTION OF MY FAMILY........................................................................................2

2.0 FINANCIAL PLANNING PROCESS.......................................................................................3
2.1 MY FAMILY CURRENT FINANCIAL SITUATION.............................................................3
CASH FLOW STATEMENT...........................................................................................................4
2.2 FINANCIAL GOALS.................................................................................................................5
2.2 ALTERNATIVE COURSES OF ACTION...............................................................................6
2.2.1 SHORT TERM GOALS..........................................................................................................7
2.2.2 INTERMIDIATE GOALS.......................................................................................................8
2.2.3 LONG TERM GOALS............................................................................................................9
CREATE AND IMPLEMENT FINANCIAL ACTION PLAN.....................................................10
REVIEW AND REVIVE THE FINANCIAL PLAN.....................................................................11
HOW MY PARENTS MANAGE CORE AREAS OF PERSONAL FINANCIAL PLANNING.
........................................................................................................................................................12
1. NET WORTH AND CASH FLOW STATEMENT................................................................12
2. DEBT MANAGEMENT PLAN..............................................................................................12
3. RETIREMENT PLAN..............................................................................................................12
4. EMERGENCY FUNDS...........................................................................................................12
5. INSURANCE COVERAGE.....................................................................................................12
6. INVESTMENT PLAN.............................................................................................................13
7. REAL ESTATE PLAN............................................................................................................13
CONCLUSION & RECOMMENDATION...................................................................................13
WHAT HAVE YOU LEARNED FROM THIS ASSIGNMENT?................................................13
1.0 INTRODUCTION OF MY FAMILY

First and foremost, Mr. Mohd Azuan Bin Mohamad currently works as a Senior Electrical Engineer at
Texas Instruments Malaysia in Keramat, Kuala Lumpur. He is 46 years old and married to Ms. Siti Nurul
Shafinaz Caroline Binti Abdullah, who is three years younger than him at 44 years old. His wife is a housewife.

Mr. Mohd Azuan earns RM 13,000 monthly. He and Ms. Siti Nurul Shafinaz have been married for 23
years and have been blessed with three sons and one daughter, all of whom are currently studying. Their first
child, Muhammad Shafiqul Aqmal, aged 22, is pursuing a degree at UiTM Bandaraya Melaka. Their second
child, Muhammad Syamil Ariq, aged 20, is also pursuing a degree at UMP Pahang. Their third child, Nur
Shakeela Alisha, aged 12, is studying at SK Bandar Rinching, Selangor. Additionally, their youngest child,
Muhammad Syahmi Aqil, is 4 years old.

They reside in Taman Pelangi Semenyih, Selangor, in a double-storey house. Furthermore, Mr. Mohd Azuan
owns a Honda CR-V as a family car, for which he pays monthly installments, and a Perodua Axia used for daily
commuting. He also owns a Yamaha R25, a 2018 model, which he uses for commuting to work. Other assets they
own include furniture and smartphones.

Overall, Mr. Mohd Azuan is a kind-hearted and loving person who takes excellent care of his family. In
summary, Mr. Azuan and Ms. Siti Nurul Shafinaz are my parents, and I'm glad to be their financial planner.
2.0 FINANCIAL PLANNING PROCESS

2.1 MY FAMILY CURRENT FINANCIAL SITUATION

NET WORTH

ASSET RM RM LIABILITIES RM RM
LIQUID ASSET: CURRENT 0
LIABILITIES
SAVING ACCOUNT 100,000
CURRENT ACCOUNT 30,000
SSPN-I 15,000

TOTAL LIQUID ASSET 145,000 TOTAL CURRENT 0

LIABILITIES

LIFESTYLE ASSET: NON – CURRENT

LIABILITIES:
MARKET VALUE OF 200,000 HONDA CRV 90,000
HONDA CRV
MARKET VALUE OF 30,000 HOUSE LOAN BANK 110,000
PERODUA AXIA
MARKET VALUE OF 15,000
YAMAHA R25
MARKET VALUE OF 300,000
HOUSE
SMARTPHONE 3,000
TOTAL LIFESTYLE 548,000 TOTAL NON- 200,000
ASSET CURRENT
LIABILITIES

INVESTMENT ASSET: TOTAL LIABILITIES 200,000

TABUNG HAJI 80,000
ASB 40,000 NET WORTH 505,000
TOTAL INVESTMENT 12,000
ASSET

TOTAL ASSET 705,000 TOTAL LIABILITIES 705,000

AND NET WORTH
CASH FLOW STATEMENT

CASH FLOW STATEMENT RM RM RM

INCOME
MONTHLY SALARY 13,000 X 12 156,000

TOTAL 156,000

EXPENSES
GROCERIES 500 X 12 6,000
INSURANCE FAMILY 550 X 12 6,600
ZAKAT PER YEAR 1,500
TRANSPORTATION FUEL 500 X 12 6,000
CAR MAINTENANCE 800
HOUSE INSTALLMENT 1,400 X 12 16,800
HONDA CRV INSTALLMENT 1,200 X 12 14,400
UTILITIES 400 X 12 4,800
UMOBILE POSTPAID 150 X 12 1,800
UNIVERSITY FEES ANNUALLY 1,600
CAR ROADTAX & INSURANCE 2,000
MOTORCYCLE ROADTAX & 400
INSURANCE
CHILDREN EXPENSES 300 X 12 3,600
DINING OUT EXPENSES 250 X 12 3,000
CLOTHING EXPENSES 1000
UNIFI BILL 200 X 12 2,400
TABUNG HAJI 500 X 12 6000

TOTAL 78,700
CONTRIBUTION TO SAVING 77,300
2.2 FINANCIAL GOALS

SHORT TERM GOALS (LESS THAN 1 YEARS)

TOTAL DURATION MONTHLY TARGET
PRIORITY GOAL COST (RM) (MONTH) COST (RM) DATE

1 FAMILY ROAD 10,000 10 1,000 25/12/2023

TRIP

2 PAY OFF 4,000 8 500 02/09/2023

PERSONAL
LOAN
3 PURCHASE NEW 5,000 5 1,000 11/11/2023
LAPTOP

INTERMIDIATE TERM GOALS (1 – 10 YEARS)

TOTAL DURATION MONTHLY TARGET
PRIORITY GOAL COST (RM) (YEARS) COST (RM) DATE

1 HOME 50,000 4 1,041.70 DEC 2027

DOWNPAYMENT

2 PAY OFF CAR 20,000 2 833.33 SEPT 2025

LOAN

3 PERFORM HAJI 100,000 3 2,777.78 MAY 2026

LONG TERM GOALS (OVER 10 YEARS)

TOTAL DURATION MONTHLY TARGET
PRIORITY GOAL COST (RM) (YEARS) COST (RM) DATE

1 RETIREMENT 1,000,000 30 2,777.77 APRIL 2053

SAVING

2 PAY OF THE 100,000 20 416.66 AUGUST 2043

MORTGAGE

3 CHILDREN 40,000 15 222.22 NOV 2038

EDUCATION
2.2 ALTERNATIVE COURSES OF ACTION

SHORT TERM GOALS (LESS THAN 1 YEARS)

FAMILY ROAD TRIP
TARGET DATE: 25/12/2023 MONTHLY COST: RM1,000

STRATEGY 1: REDUCES EXPENSES

STRATEGY 2: SELL UNUSED ITEMS

STRATEGY 3: PART TIME JOB

INTERMIDIATE GOALS (1 – 10 YEARS)

PAY OFF CAR LOAN
TARGET DATE: SEPT 2025 MONTHLY COST: RM833.33

STRATEGY 1: REFINANCE THE CAR LOAN TO REDUCE INTEREST RATES AND

MONTHLY PAYMENTS.
STRATEGY 2: MAKE EXTRA PAYMENTS TOWARDS THE PRINCIPAL BALANCE TO
REDUCE THE LOAN TERM.
STRATEGY 3: SELL THE CAR AND PURCHASE A MORE AFFORDABLE VEHICLE TO
REDUCE THE LOAN AMOUNT.

LONG TERM GOALS (OVER 10 YEARS)

RETIREMENT SAVING
TARGET DATE: APRIL 2053 MONTHLY COST: RM2777.77

STRATEGY 1: INCREASE RETIREMENT CONTRIBUTIONS OR INVESTMENT

ALLOCATIONS TO ACCELERATE SAVINGS.
STRATEGY 2: CONSIDER DOWNSIZING OR RELOCATING TO A MORE
AFFORDABLE AREA TO REDUCE LIVING EXPENSES.
STRATEGY 3: WORK WITH A FINANCIAL ADVISOR TO OPTIMIZE INVESTMENT
STRATEGIES AND MAXIMIZE RETURNS.
2.2.1 SHORT TERM GOALS

STRATEGY 1: REDUCES EXPENSES

PROS CONS

INCREASED SAVINGS QUALITY OF LIFE IMPACT

REDUCED STRESS LIMITED OPPORTUNITIES

IMPROVED FINANCIAL DISCIPLINE SOCIAL AND EMOTIONAL IMPACT

STRATEGY 2: SELL UNUSED ITEMS

PROS CONS

DECLUTTERING SPACE TIME – CONSUMING

EXTRA INCOME POTENTIAL LOWER RETURNS

ENVIRONMENTAL IMPACT EMOTIONAL ATTACHMENT

STRATEGY 3: PART TIME JOB

PROS CONS

INCREASED INCOME TIME – CONSUMING

FINANCIAL DISCIPLINE MENTAL AND PHYSICAL FATIQUE

GAIN NEW SKILLS POTENTIAL IMPACT ON PERSONAL LIFE

2.2.2 INTERMIDIATE GOALS

STRATEGY 1: REFINANCE THE CAR LOAN TO REDUCE

INTEREST RATES AND MONTHLY PAYMENTS.
PROS CONS

LOWER INTEREST RATES EXTENDED LOAN TERM

REDUCED MONTHLY PAYMENTS NEGATIVE EQUITY

IMPROVED FINANCIAL FLEXIBILITY ADDITIONAL FEES AND COSTS

STRATEGY 2: MAKE EXTRA PAYMENTS TOWARDS THE

PRINCIPAL BALANCE TO REDUCE THE LOAN TERM.
PROS CONS

REDUCED INTEREST PAYMENTS POTENTIAL PENALTIES

SHORTER LOAN TERM IMPACT ON CASH FLOW

FINANCIAL FREEDOM OPPORTUNITY COST

STRATEGY 3: SELL THE CAR AND PURCHASE A MORE

AFFORDABLE VEHICLE TO REDUCE THE LOAN AMOUNT.
PROS CONS

REDUCED LOAN AMOUNT POTENTIAL LOSS ON CURRENT CAR

LOWER MONTHLY PAYMENTS LIMITED FEATURES OR QUALITY

DECREASED DEPRECIATION TRANSACTION COSTS

2.2.3 LONG TERM GOALS

STRATEGY 1: INCREASE RETIREMENT CONTRIBUTIONS OR

INVESTMENT ALLOCATIONS TO ACCELERATE SAVINGS.
PROS CONS

FASTER RETIREMENT SAVINGS GROWTH REDUCED CURRENT DISPOSABLE INCOME

POTENTIAL TAX BENEFITS LIMITED LIQUIDITY

COMPOUND INTEREST BENEFITS RISK OF OVER – ALLOCATING

STRATEGY 2: CONSIDER DOWNSIZING OR RELOCATING TO A

MORE AFFORDABLE AREA TO REDUCE LIVING EXPENSES.
PROS CONS

LOWER COST OF LIVING ADJUSTMENT CHALLENGES

FINANCIAL FLEXIBILITY LIMITED JOB OPPORTUNITY

REDUCED FINANCIAL STRESS SOCIAL AND FAMILY IMPACT

STRATEGY 3: WORK WITH A FINANCIAL ADVISOR TO OPTIMIZE

INVESTMENT STRATEGIES AND MAXIMIZE RETURNS.
PROS CONS

PROFESSIONAL EXPERTISE FEES AND COST

DIVERSIFICATION AND RISK MANAGEMENT CONFLICTS OF INTEREST

MAXIMIZED RETURNS DEPENDENCY AND LACK OF CONTROL

CREATE AND IMPLEMENT FINANCIAL ACTION PLAN

SHORT TERM GOAL

REDUCED EXPENSES

Saving money as a family is about teamwork and smart choices. Families can start by making a
budget together, figuring out where money goes, and finding areas to spend less. Cutting back on
unnecessary things, using less electricity and water, cooking at home, and finding free activities
can all help reduce expenses. Reviewing memberships and subscriptions and using transportation
wisely are also great ways to save. When families work together and make small changes, they
can save more money for important things while having fun finding new ways to save together.

INTERMIDIATE GOAL
REFINANCE THE CAR LOAN TO REDUCE INTEREST RATES AND MONTHLY
PAYMENTS

Refinancing the car loan to lower interest rates and monthly payments can significantly
contribute to your family's intermediate financial goals. By securing a reduced interest rate, this
move minimizes the overall cost of the loan, freeing up funds that can be redirected towards
achieving other important milestones, such as building savings or investing in education or
homeownership. Moreover, the decreased monthly payments resulting from refinancing provide
additional financial flexibility, enabling your family to allocate more resources towards these
intermediate objectives. However, it's essential to ensure that the terms of the refinanced loan
align with your family's financial strategy, allowing for progress towards these goals without
imposing excessive costs or extending the loan term beyond your comfort zone.

LONG TERM GOAL

INCREASE RETIREMENT CONTRIBUTIONS OR INVESTMENT ALLOCATIONS
ACCELERATE SAVINGS

Increasing retirement contributions or investment allocations can significantly accelerate your

family's savings toward long-term goals. By allocating more funds toward retirement accounts or
investments, your family can take advantage of compound interest, allowing your money to
grow faster over time. This increased growth potential contributes to building a more substantial
nest egg for retirement or achieving other long-term aspirations, such as buying a home or
funding education. Moreover, prioritizing higher contributions aligns with your family's goal of
securing a more financially stable future by ensuring sufficient funds for later years. However,
it's crucial to review investment strategies carefully, seeking diversified options that match your
risk
tolerance and long-term objectives while ensuring these increased contributions do not strain your
current financial obligations.
REVIEW AND REVIVE THE FINANCIAL PLAN

Reviewing and revising my family financial plan annually is important to ensure that my family
and our financial advisor can take an in-depth look at your goals and prioritize what matters.
This proactive approach can help my family avoid making impulse decisions based on changes in
market conditions and instead focus on achieving our long-term financial objectives. By turning
information into knowledge, we can make informed decisions about our investments, retirement
planning, and other financial goals. To make my family financial goals specific, measurable, and
actionable, we can use the SMART method, which involves setting benchmarks that are specific,
measurable, achievable and relevant.
HOW MY PARENTS MANAGE CORE AREAS OF PERSONAL
FINANCIAL PLANNING.

1. NET WORTH AND CASH FLOW STATEMENT

To manage net worth and cash flow statement, my parents can start by calculating their current net worth and
identifying their spending habits. They can then build a budget to reach their financial goals and prioritize reducing debt
and building savings for emergencies. Regularly reviewing and revising their financial plan is crucial to ensure it
remains aligned with their financial goals and objectives, allowing them to make necessary adjustments to stay on track
and maintain progress towards achieving these goals. A solid financial plan provides guidance over time and serves as a
way to track progress towards their goals.

2. DEBT MANAGEMENT PLAN

When managing their debt management plan, my parents can evaluate their current debt, develop a budget, choose a
debt repayment strategy, make extra payments on debts, negotiate with creditors if necessary, and seek professional
help when needed. Regularly reviewing and adjusting their plan ensures that it remains effective and aligned with their
financial goals and objectives, allowing them to make necessary adjustments to stay on track and maintain progress
towards achieving these goals.

3. RETIREMENT PLAN

When managing their retirement plan, my parents can work with a financial planner to determine the appropriate risk
level for their investments, create a budget for retirement savings, and make adjustments to their plan based on changes
in life circumstances or financial priorities.
They can also explore government programs and resources to help them plan for retirement and manage their assets and
risk by regularly reviewing and adjusting their retirement plan, your parents can ensure that they remain on track to
achieve their financial goals and maintain a comfortable lifestyle during retirement.

4. EMERGENCY FUNDS

To manage their emergency funds, my parents can start by organizing their finances, writing down their income and
expenses, and paying down debt, especially high-interest debt, while saving for an emergency fund. They can also
consider hiring a financial planning team to help manage their assets and update their investments. It's important for
them to review their spending, build a savings buffer, and decide what they're saving for. Regularly reviewing and
adjusting their financial plan ensures that it remains effective and aligned with their financial goals and objectives,
allowing them to make necessary adjustments to stay on track and maintain progress towards achieving these goals.

5. INSURANCE COVERAGE

To manage insurance coverage, my parents can start by evaluating their assets, debts, savings, income, emergency funds, and
insurance policies to understand their financial standing. They should regularly review and update their insurance policies, such as
life insurance, health insurance, and property insurance, to ensure they have adequate coverage for their needs. It's also important
for them to organize important contacts, such as lawyers, physicians, financial advisers, and insurance agents, and keep a list of
their important documents, such as their latest tax return or funeral instructions. By breaking down finances into smaller steps and
discussing their finances in a series of meetings, your family can better understand their financial situation and make informed
decisions about their insurance coverage.
 6. INVESTMENT PLAN

When managing their investment plan, my parents take several steps to ensure its success. First, they gather all their financial
accounts and documents to have a clear understanding of their current financial situation. Consider hiring a financial planning team
to help make decisions and manage their assets, as a skilled financial planner can determine the appropriate risk level for their
investments. It's also important to update their investments if necessary to align with their financial goals and consider the
combined interests of the parent and the ultimate beneficiaries. Regularly reviewing and revising the investment plan is crucial to
ensure it remains aligned with their financial goals and objectives, allowing them to make necessary adjustments to stay on track
and maintain progress towards achieving these goals.

7. REAL ESTATE PLAN

When managing their real estate plan, my parents should first understand the value of their real estate and work with a financial
professional to determine the investment and tax implications of owning or buying properties. They should also consider their
goals for their real estate and build a budget to reach those goals. Exploring government programs can also be helpful. Estate
planning is an important part of managing real estate, and it involves creating a tailor-made, legally binding series of documents
that outlines your last wishes for yourself and your assets. Regularly reviewing and revising the real estate plan is crucial to ensure
it remains aligned with your financial goals and objectives, allowing them to make necessary adjustments to stay on track and
maintain progress towards achieving these goals.

CONCLUSION & RECOMMENDATION

In conclusion, family financial planning should take care of the entire family and, therefore, needs to be comprehensive and dynamic,
involving all family members in the decision-making process. It is emphasized that there is no right time to start financial planning, and
the sooner it is done, the better.

My recommendation is to improve family financial planning, it is recommended to start by defining your family's goals, understanding
your current financial situation, and creating a personalized plan that addresses your family's needs and objectives. It is important to
involve all family members in the decision-making process and communicate your financial plans and goals with them. Regularly
reviewing and updating your plan to accommodate changes in your family's life and financial needs is also crucial. Additionally, it is
recommended to seek professional advice from financial advisors, estate planners, or attorneys to help you make informed decisions and
create a strong financial plan. Finally, it is important to avoid procrastination and start financial planning as soon as possible to ensure
that your family's short-term and long-term financial goals are addressed, and their future is secured.

WHAT HAVE YOU LEARNED FROM THIS ASSIGNMENT?

What I have learned from family financial planning is crucial to start financial planning as early as possible, and it is never too early or
too late to begin. Secondly, involving all family members in the decision-making process and regularly reviewing and updating the
financial plan is essential. Thirdly, setting clear financial goals, understanding the family's current financial situation, and creating a
personalized plan are critical steps in the financial planning process. Additionally, seeking professional advice from financial advisors
and being disciplined in following the financial plan are important for success. Finally, open communication about financial matters
within the family is vital, and sharing experiences and decisions can help educate and prepare the next generation for financial
responsibility.