Part One

 

Sam and Judy graduated last spring from Suffolk. For the moment they are living in an au pair apartment in Judy’s parents house in Chelmsford and commuting into their jobs. They got married at the end of the summer. Their financial picture is as follows:

 

They have student loans totaling $35,000,

 

They have a three-year old Toyota that is worth $15,000

They have a car loan of $8000.

 

Both Sam and Judy have the usual array of “things.”

 

Judy has clothing that is worth @ $4500

Sam has clothing that is worth @ $2000.

They have athletic equipment worth about $2000.

They both have computers worth $800 each.

They have iPods worth $200 each,

They have cell phones worth $75 each

They have a TV worth $50.

 

At the moment, neither of them has significant savings nor they don’t have any credit card debt.

 

Your Assignment is to:

 

Make up a Balance Sheet chart for them as a couple. That means that you will itemize their assets (things that they own) and their liabilities (things that they owe) and list them in the format that we have seen in the book and in class in the slides.

 

Then, develop some financial goals for them. Identify some alternative courses of action that they will need to start addressing their goals. Take into consideration their life situation now, and what they could be over the intermediate term, say five years, and the long term, say ten years. Don’t worry about economic conditions.

 

 

 

The Continuing Saga of Sam and Judy

 

Part Two

 

 

 

It has been a year since Sam and Judy graduated and they have both done well in their jobs. Sam is now earning $35,000 and Judy is earning $36,000 so they now have take-home pay of $3,550. They are still living with Sam’s parents and have agreed to start chipping in for rent and utilities. They are now paying $400 per month rent and another $200 a month for utilities. Their financial statistics are now:

 

Gross Annual Income:                                                          Sam:   $35,000

Judy:  $36,000

Total                                                                          $71,000

 

Net Monthly Income (assuming withholding at 40%)                 $3,550

 

Their monthly expenses are:

 

Rent                                                    $400

Utilities                                               $200

Student loan                                      $300

Car loan:                                             $350

Car insurance                                                $225

Commuting costs                               $263

Food at home                                                $300

Food and Entertainment                  $300

Dry Cleaning                                      $40

Miscellaneous                                    $400

 

They have the “things,” clothing, athletic equipment, computers, iPods, cell phones, TVs, etc. that we saw in Assignment 1 but they feel frustrated because there are a number of items that they want to have but they don’t have the money to buy them. The things that they want to buy are:

 

• A new camera: When they were on their honeymoon Sam was upset because they weren’t able to take pictures to augment their wedding album. Sam has taken a look at the new Nikon cameras and can get a terrific package for $700.
• A second car, so that they can run errands separately on the weekend. They also are pretty sure that they will need two cars when they get their own place. They are pretty sure that they can get a used car for about $11,000.
• A 52” LCD television. They are both sports fans and love the idea of being able to watch games at home on a big screen. They figure that they will need to pay $1100 for the model that they want.
• A wardrobe that is suitable for business wear. They both have nice clothes that were appropriate for student life, but they do not have the kind of clothes that they need to work in an office. They think that they will each need to spend at least $1500 just to get the basics.

 

 

Your assignment is to:

• Discuss what are the different kinds of credit that is available that would allow them to purchase the things that they want.
• Make your recommendations for them regarding what they should buy and when they should buy it and what kind of credit/loan they should use. Talk about why you are making your recommendations.
• Include an estimate on the monthly cost of each of the loans that they decide to use to purchase things.
• Prepare a budget that shows how their the rent and utilities as well as any purchase that they make will impact their financial situation.

 

 

The Continuing Saga of Sam and Judy

 

Part Two

 

 

 

It has been a year since Sam and Judy graduated and they have both done well in their jobs. Sam is now earning $35,000 and Judy is earning $36,000 so they now have take-home pay of $3,550. They are still living with Sam’s parents and have agreed to start chipping in for rent and utilities. They are now paying $400 per month rent and another $200 a month for utilities. Their financial statistics are now:

 

Gross Annual Income:                                                          Sam:   $35,000

Judy:  $36,000

Total                                                                          $71,000

 

Net Monthly Income (assuming withholding at 40%)                 $3,550

 

Their monthly expenses are:

 

Rent                                                    $400

Utilities                                               $200

Student loan                                      $300

Car loan:                                             $350

Car insurance                                                $225

Commuting costs                               $263

Food at home                                                $300

Food and Entertainment                  $300

Dry Cleaning                                      $40

Miscellaneous                                    $400

 

They have the “things,” clothing, athletic equipment, computers, iPods, cell phones, TVs, etc. that we saw in Assignment 1 but they feel frustrated because there are a number of items that they want to have but they don’t have the money to buy them. The things that they want to buy are:

 

• A new camera: When they were on their honeymoon Sam was upset because they weren’t able to take pictures to augment their wedding album. Sam has taken a look at the new Nikon cameras and can get a terrific package for $700.
• A second car, so that they can run errands separately on the weekend. They also are pretty sure that they will need two cars when they get their own place. They are pretty sure that they can get a used car for about $11,000.
• A 52” LCD television. They are both sports fans and love the idea of being able to watch games at home on a big screen. They figure that they will need to pay $1100 for the model that they want.
• A wardrobe that is suitable for business wear. They both have nice clothes that were appropriate for student life, but they do not have the kind of clothes that they need to work in an office. They think that they will each need to spend at least $1500 just to get the basics.

 

 

Your assignment is to:

• Discuss what are the different kinds of credit that is available that would allow them to purchase the things that they want.
• Make your recommendations for them regarding what they should buy and when they should buy it and what kind of credit/loan they should use. Talk about why you are making your recommendations.
• Include an estimate on the monthly cost of each of the loans that they decide to use to purchase things.
• Prepare a budget that shows how their the rent and utilities as well as any purchase that they make will impact their financial situation.