To check a plan against a goal, multiply what is saved each month by the months available, and compare the total with the target. The gap, if any, tells you what to change.
This lesson completes the consumer mathematics and financial planning section. It uses the surplus from building a cash-flow statement from supplied data.
What are the steps?
Write down your assumptions first.
- State the target and the time allowed.
- Find a realistic monthly saving from the cash-flow statement.
- Total saved = monthly saving × months.
- Compare with the target, and calculate any shortfall.
Worked example: a laptop fund
Aina is an invented student. Her goal is RM5 000 in 18 months, and she can save RM250 each month. Assume no interest.
Total saved = 250 × 18 = RM4 500. Shortfall = 5 000 − 4 500 = RM500. The plan does not meet the goal.
Fix 1: save more. Needed each month = 5 000 ÷ 18 = 277.78, so round up to RM278. Check: 278 × 18 = RM5 004, which reaches the target.
Fix 2: take longer. At RM250 each month, 5 000 ÷ 250 = 20 months. Check: 250 × 20 = RM5 000.
The mistake that uses the best month
Aina’s surplus was RM750 in January but −RM350 in February. A student might plan on RM750 each month and conclude that 750 × 18 = RM13 500 is far more than RM5 000.
That plan assumes every month looks like the best one. The usual surplus is the safer figure, and any one-off item must be allowed for.
Check yourself
The goal is RM3 600 in 12 months, and the monthly saving is RM280. Does the plan meet the goal? If not, what monthly saving is needed?
Answer
Total saved = 280 × 12 = RM3 360. The shortfall is 3 600 − 3 360 = RM240, so the plan does not meet the goal.
Needed each month = 3 600 ÷ 12 = RM300. Check: 300 × 12 = RM3 600.
What to study next
Test all four skills in the consumer mathematics practice set. Then see how percentages behave in several steps in rates and percentages in multistep consumer questions.
If you want a teacher to check your plan arithmetic on new questions, see online one-to-one Mathematics tuition.