Ashley, 34, and Donovan, 31, want to buy their first home. Their current combined net income is $65,000, and they have two auto loans totaling $32,000. They have saved approximately $12,000 for the purchase of their home and have total assets worth $55,000, which are mostly savings for retirement. Donovan has always been cautious about spending large amounts of money, but Ashley really likes the idea of owning their own home. They do not have a budget, but they do keep track of their expenses, which amounted to $55,000 last year, including taxes. They pay off all credit card bills on a monthly basis and do not have any other debt or loans outstanding. Other than that, they do not spend a great deal of time tracking their finances. They decide to seek help from you, a friend they know budgets successfully.

You make the call and provide the needed advice. What other financial information from Donovan and Ashley would be necessary or helpful for you to develop more complete statements? Give as much detail as possible. What six- to eight-step process should Ashley and Donovan undertake to develop a budget?

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