Module 5: Money Management - Keeping More Money in Your Pocket
Jordan and Alice are a young married couple. They have a three-year-old child named Anthony and a dog named Jack. Jordan is a manager at the local grocery store and Alice is a teller at a bank. Their combined net montly income is $4,400.00. They want to be financially sucessful and know that this means having a solid budget.
The couple has enough income to provide an adequate lifestyle at this point, but they would like to buy a second car. Their apartment is simple, but comfortable. They take care of themselves, Anthony, and Jack with sensible diets, exercise, and health care. For them, having insurance is essential. They both work, so childcare is a must. They maintain financial health by keping up with all financial commitments, such as making payments towards Alice's student loan. They regard saving for their retirement as essential. Like most people, they are locked into their fixed expenses, but they have flexibility with their variable expenses. Jordan has considered carpooling to work and Alice plans to start clipping coupons.
The couple realizes that if they want to purchase a second car within the next year, they need to set a financial goal in order to save enough money for a down payment. As you can see from their monthly expense/income document, they already practice "paying yourself first" and have built savings into their expenses. They currently have $2,000.00 in savings, $1,500.00 in savings bonds, and $800.00 in checking. They owe $4,500.00 on their current car.
You are Jordan and Alice's financial advisor. Use all of the information you have to help them develop a budget that allows them to save more and spend less on variable expenses.
Resources:
When you have completed your assessment and included all of the information listed above, submit your assignment to the dropbox. Be sure to include any of the resource documents that you used for your calculations.
Checklist:
Here is a checklist for this project. Be sure to include all of the required elements.
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Identify the couple's fixed expenses.
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Identify the couple's variable expenses.
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Examine the couple's montly spending habits and identify those expenses that could be reduced or removed to help them reach their financial goals.
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Identify the couple's assets.
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Identify the couple's liabilities.
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Calculate the couple's net worth.
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Calculate the current balance on the couple's budget.
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Develop a new budget, keeping in mind what is important to the couple, so they they can save $150.00 more each month and have $1,800.00 at the end of the year for a down payment on a new car.
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Determine the likelihood that the couple would be given a car loan based on their net worth.
Once you have completed this module, please complete the module test.