Case Study

After the Divorce: Securing the Financial Future Case Study Overview Read the case study and answer the questions. All written responses require thoroughness by writing in complete sentences to add detail and accuracy, along with supporting rationale and data. Submit your answers on 8.5 x 11 paper with one inch margins, doubled-spaced, in 12 font and include citations and a bibliography in APA formatting. Case Study People who marry today have a 50/50 chance of becoming divorced. Mary Foxe, 34, recently became an account representative. Married for 4 % years, she now lives at home with her parents. Her major goal is to get on with her life- both emotionally and financially. Before her wedding, Foxe had $8,000 in the bank. Today, she owes $2,000 on credit cards and $1,000 to her divorce attorney and has a $9.,000 car loan balance. "I want to pay off our debts as soon as possible," says Foxe. "My ex-husband just lost his job, so he won't. Then I want to build up my savings again and start investing." Foxe earns $29,300 annually, plus another $200 in interest. Her $11,000 net worth includes $550 in a checking account, $3,000 in passbook savings, $3,950 in an S&P 500 stock index mutual fund, $2,500 in U.S. savings bonds, a two-year old car worth $7,500, and a $1,000 computer. Her home furnishings from her previous married household, worth $4,500, are presently in a rented storage locker. Short-term, Foxe would like to increase her savings to $10,000, pay off her credit cards, and be able to afford her own apartment. She is also planning to advance in her career and is taking advanced computer courses at a local college. In 3 to 10 years, Foxe would like to own a new car and a condo or house of her own. She says "I hope to be remarried with kids and earning a good salary with money in the bank." Foxe's monthly expenses total $1,550. This includes $150 a month "rent" to her parents, a $250 car loan payment with 36 months remaining, $200 toward credit card debt and the attorney's fees, $100 for tuition, $100 for gas and car expenses, and $500 for items such as food, clothing. auto insurance, entertainment, and the storage locker rental fee. She also saves $250 a month in a stock index fund and U.s. savings bonds. Her father is a certified financial planner and recommended investing in the index mutual fund for long-term growth. Foxe has group term life insurance paying 2 times her salary and employer-paid health insurance with a $1 million lifetime limit. Her car has 100/300/50 liability coverage and collision and comprehensive coverage with a $100 deductible. Foxe admits that she has done absolutely no planning or saving for retirement. She wants to retire no later than age 67 and move to a state that has lower living costs and warm weather year-round. Her hope for her retirement years is to "have money to do fun things and not become a bag lady." Her employer provides a 401(k) plan but, so far, Foxe has not signed up, 1 even though her employer matches contributions up to 6 % of workers' salaries. She also does not have an IRA Answer the following questions: 1. Advise Foxe in regards to (1) saving for short-term and (2) long-term goals. 2. Create a monthly or yearly budget (showing money coming in and going out) with goals in-mind. 3. Explain why 'your' plan will help Foxe meet her goals--if she sticks with it. After the Divorce: Securing the Financial Future Case Study Overview Read the case study and answer the questions. All written responses require thoroughness by writing in complete sentences to add detail and accuracy, along with supporting rationale and data. Submit your answers on 8.5 x 11 paper with one inch margins, doubled-spaced, in 12 font and include citations and a bibliography in APA formatting. Case Study People who marry today have a 50/50 chance of becoming divorced. Mary Foxe, 34, recently became an account representative. Married for 4 % years, she now lives at home with her parents. Her major goal is to get on with her life- both emotionally and financially. Before her wedding, Foxe had $8,000 in the bank. Today, she owes $2,000 on credit cards and $1,000 to her divorce attorney and has a $9.,000 car loan balance. "I want to pay off our debts as soon as possible," says Foxe. "My ex-husband just lost his job, so he won't. Then I want to build up my savings again and start investing." Foxe earns $29,300 annually, plus another $200 in interest. Her $11,000 net worth includes $550 in a checking account, $3,000 in passbook savings, $3,950 in an S&P 500 stock index mutual fund, $2,500 in U.S. savings bonds, a two-year old car worth $7,500, and a $1,000 computer. Her home furnishings from her previous married household, worth $4,500, are presently in a rented storage locker. Short-term, Foxe would like to increase her savings to $10,000, pay off her credit cards, and be able to afford her own apartment. She is also planning to advance in her career and is taking advanced computer courses at a local college. In 3 to 10 years, Foxe would like to own a new car and a condo or house of her own. She says "I hope to be remarried with kids and earning a good salary with money in the bank." Foxe's monthly expenses total $1,550. This includes $150 a month "rent" to her parents, a $250 car loan payment with 36 months remaining, $200 toward credit card debt and the attorney's fees, $100 for tuition, $100 for gas and car expenses, and $500 for items such as food, clothing. auto insurance, entertainment, and the storage locker rental fee. She also saves $250 a month in a stock index fund and U.s. savings bonds. Her father is a certified financial planner and recommended investing in the index mutual fund for long-term growth. Foxe has group term life insurance paying 2 times her salary and employer-paid health insurance with a $1 million lifetime limit. Her car has 100/300/50 liability coverage and collision and comprehensive coverage with a $100 deductible. Foxe admits that she has done absolutely no planning or saving for retirement. She wants to retire no later than age 67 and move to a state that has lower living costs and warm weather year-round. Her hope for her retirement years is to "have money to do fun things and not become a bag lady." Her employer provides a 401(k) plan but, so far, Foxe has not signed up, 1 even though her employer matches contributions up to 6 % of workers' salaries. She also does not have an IRA Answer the following questions: 1. Advise Foxe in regards to (1) saving for short-term and (2) long-term goals. 2. Create a monthly or yearly budget (showing money coming in and going out) with goals in-mind. 3. Explain why 'your' plan will help Foxe meet her goals--if she sticks with it