Case Study

Brian and Stephanie Bryant are a young couple in their early 30s whose combined annual income is 95,000 and their net income is $77,000. They have been married for 3 years and are renting a two-bedroom apartment for $1,500/month in Sacramento. Because they both work, they feel they do not have time to prepare meals at home or do lot of housework. They generally buy lunch every day and eat out/takeout dinner at least 3-4 times/week. Brian and Stephanie also like to go out partying, concerts, movies, hanging out during the weekends either with friends or by themselves. Durings the COVID-19 pandemic, Brian and Stephanie have been home but they continue to order take-out because they do not feel like cooking. They are both paying off their student loans; Brian pays $400/month and Stephanie $350/month. Stephanie likes to keep up with the latest fashion trends, so she is always purchasing new professional and casual clothes and other accessories from online retailers averaging about $150/month. In February 2020, the couple also leased two new cars for the next three years. The Bryants have to pay for other household expenses that you have to estimate to answer the questions below. Because the couple live in Sacramento, you will be able to estimate how much they spend on each of their household expenses.

The Bryant have four credit cards between them, and a lot of outstanding balance for which they are making minimum payments on all four cards. They used their credit cards to pay for their wedding expenses three years ago and they are continuing to pay for the charges. They have a checking and savings account but with very little money. The Bryants have discussed starting a family but have decided to put if off because they do not think that they are financially ready to start a family. Stephanie's parents have encouraged the couple to start saving for a house and retirement but Brian and Stephanie have not given it much consideration. The couple thinks that they have plenty of time later on to plan for buying a home or to start a retirement plan.

You are counseling Brian and Stephanie on how to manage their money and to start a stable financial plan for their future. Keep in mind that the couple are bringing in a decent household income but are spending it all by living the high life so how will you go about counseling them on important financial topics by answering the questions below.

1. You have to make better and realistic budget for Brian and Stephanie Bryant that you think will allow them to start saving their money and to cut down on their current spending. You must develop a side-by-side budget using a standardized budget format (with 4 columns and several rows) to identify the income and various categories of expenses.
2. The side-by-side budget must have four columns. 1. Expenses 2. Current expense amount, 2. proposed expense amount that you are recommending, and 3. your comments on how or why the increase or decrease in spending for that particular expense is being proposed by you. You must estimate all the other household expenses that this young couple spend each month (40 points). There is no minimum word count requirement for the budget.

1. What are some strategies for the Bryants to reduce their credit card debt?
2. What savings, investments and insurance options should Brian and Stephanie consider when planning for their future?