case study
Vikki Rocco, (age 26) has been living in her apartment for three years. Her savings system is well organized and she feels comfortable about the progress she is making with her financial goals. Her credit card balance is now paid in full monthly. She is continuing to save more than 10% of her gross salary in her 401(k) plan and she stay within budget. After dating for two years, she is engaged to Tim Treble (age 28), and they are planning to be married in nine months.
Because they want to buy a house within the next 2 or 3 years, Vikki and Tim decide to meet with a mortgage lender to determine how large of a mortgage they will be able to afford an what they need to save. The mortgage lender asks them both questions about their finances that they hadn’t yet considered. Although Vicky feel comfortable with the questions, Tim is nervous when he forced to take a closer look at his finances. He discovers that he has much more debt than he realized. Vikki and Tim’s financial statistics are shown below :
Assets Liabilities Checking Account *$10,500 (Vikki), $4,000 (Tim) Including their emergency funds Student Loan $9,000 Credit Card Balances (Tim) Car $2,500 (Vikki), $15,000 (Tim) 401 (k) balance $25,000 (Vikki), $8,000 (Tim)
Income Monthly Expenses Gross Annual Salary $50,000 (Vikki) $48,000 (Tim) After-Tax Monthly Salary $2,917 (Vikki) $2,800 (Tim) Rent - $750 (Vikki), $450 (Tim) Food - $250 (Vikki), $350 (Tim) Student Loan - $250 Credit Card Payment - $300 (Tim) Entertainment-$300 Wedding Expenses - $500 Gas/Repairs - $350 (combined)
Retirement Savings : 401 (k) Vikki - $500 per month, plus 50% employer match on first 7% of pay. Tim - $400 per month, plus 50% match on first 8% of
Because they want to buy a house within the next 2 or 3 years, Vikki and Tim decide to meet with a mortgage lender to determine how large of a mortgage they will be able to afford an what they need to save. The mortgage lender asks them both questions about their finances that they hadn’t yet considered. Although Vicky feel comfortable with the questions, Tim is nervous when he forced to take a closer look at his finances. He discovers that he has much more debt than he realized. Vikki and Tim’s financial statistics are shown below :
Assets Liabilities Checking Account *$10,500 (Vikki), $4,000 (Tim) Including their emergency funds Student Loan $9,000 Credit Card Balances (Tim) Car $2,500 (Vikki), $15,000 (Tim) 401 (k) balance $25,000 (Vikki), $8,000 (Tim)
Income Monthly Expenses Gross Annual Salary $50,000 (Vikki) $48,000 (Tim) After-Tax Monthly Salary $2,917 (Vikki) $2,800 (Tim) Rent - $750 (Vikki), $450 (Tim) Food - $250 (Vikki), $350 (Tim) Student Loan - $250 Credit Card Payment - $300 (Tim) Entertainment-$300 Wedding Expenses - $500 Gas/Repairs - $350 (combined)
Retirement Savings : 401 (k) Vikki - $500 per month, plus 50% employer match on first 7% of pay. Tim - $400 per month, plus 50% match on first 8% of