• 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
MINI CASE STUDY
PERSONAL FINANCIAL STATEMENT
• 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
• - 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.
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.
• 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.
• 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.