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    Case Study 3 - Steve and Maggie

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    Hà Thị Cẩm Ly
    Steve and Maggie are a young couple with a 1 year old child. Steve earns $80,000 annually as an engineer while Maggie previously earned $45,000 as a preschool teacher but is now a stay-at-home mom. They rent a house for $450 per week and want to buy a $500,000 house with 20% down. They have various expenses including $150 per month for utilities, $70 for internet/TV, $150 per week for food, and loan and car payments totaling over $400 per month. They ask a financial planner to set financial goals, create a budget, and analyze their position to provide advice on improving their situation.

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    Case Study 3 - Steve and Maggie

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    Hà Thị Cẩm Ly
    38 views6 pages
    Steve and Maggie are a young couple with a 1 year old child. Steve earns $80,000 annually as an engineer while Maggie previously earned $45,000 as a preschool teacher but is now a stay-at-home mom. They rent a house for $450 per week and want to buy a $500,000 house with 20% down. They have various expenses including $150 per month for utilities, $70 for internet/TV, $150 per week for food, and loan and car payments totaling over $400 per month. They ask a financial planner to set financial goals, create a budget, and analyze their position to provide advice on improving their situation.

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    Case study 3_Steve and Maggie

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    Steve and Maggie are a young couple with a 1 year old child. Steve earns $80,000 annually as an engineer while Maggie previously earned $45,000 as a preschool teacher but is now a stay-at-home mom. They rent a house for $450 per week and want to buy a $500,000 house with 20% down. They have various expenses including $150 per month for utilities, $70 for internet/TV, $150 per week for food, and loan and car payments totaling over $400 per month. They ask a financial planner to set financial goals, create a budget, and analyze their position to provide advice on improving their situation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    38 views6 pages

    Case Study 3 - Steve and Maggie

    Uploaded by

    Hà Thị Cẩm Ly
    Steve and Maggie are a young couple with a 1 year old child. Steve earns $80,000 annually as an engineer while Maggie previously earned $45,000 as a preschool teacher but is now a stay-at-home mom. They rent a house for $450 per week and want to buy a $500,000 house with 20% down. They have various expenses including $150 per month for utilities, $70 for internet/TV, $150 per week for food, and loan and car payments totaling over $400 per month. They ask a financial planner to set financial goals, create a budget, and analyze their position to provide advice on improving their situation.

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    MINI CASE STUDY

    PERSONAL FINANCIAL STATEMENT


    • Steve and Maggie are a young couple with a 1 year old baby.
    Steve is an engineer with a salary of 80,000 per annum. After
    deducting taxes and other deductions, Steve can take home
    of $2286.47 per fortnight. Maggie is now a full-time mom
    taking care of their young children, so they don't need to hire
    a nanny, therefore they can save $450 per week for that.
    Before having children, Maggie was a preschool teacher with
    a salary of $45,000 per year (equivalent to $1401 after taxes
    and other deductions). Currently they only have $3000 saved
    in the checking account.
    • Steve and Maggie list the following information to ask for
    advice from a personal finance professional:
    • - This couple is renting a house with a rental cost of $450 per
    week. They also want to purchase a house of $500,000 with a
    down payment 20% of the house value.
    • - They have 2 cell phones with a monthly cost of $40
    • - Electricity and water bill is estimated at about $150 per
    month
    • - Internet and TV bills are estimated at $70 per month
    • They spend about $150 per week on incidental expenses
    like clothes and entertainment
    • - Food cost per week is $150
    • - Steve goes to work by bus, so his bus fare costs $120
    per month
    • - The couple also has a newly purchased car for $15,000
    that comes with a 5-year loan at an interest rate of
    14.75%. This car costs a registration fee of $287.75 per
    year. They also need to purchase two types of warrants
    of fitness for this vehicle, which costs $120 per year.
    • They spend $25 per week on petrol.
    • - The car has a market price of $12,000 now.
    • - Regarding debt, they have a personal loan of $7,000 with
    installments of $151.67 per month.
    • - They also recently replaced some appliances in their house
    and so they have a $4,600 hire purchase debt, which means
    they have to pay $150 every 2 weeks for the next 3 years.
    • - The above personal loans and hire purchase debt have
    interest rates of 22.5%.
    • - The value of household items, including those purchased in
    installments, is currently $15,000.
    • - Steve has accumulated $1,750 in a savings account.
    • Based on the above information, if you are this couple’s
    personal financial planner:
    • 1. Set short-term, middle-term, and long-term financial
    goals for the couple.
    • 2. Create a financial statement (balance sheet and income
    statement) for this family on a fortnight basis.
    • 3. Analyse this family’s financial position by applying proper
    ratios, identify areas of concern based on your analysis and
    give them advices on ways to improve their financial
    situation.

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