Chandler (30) and Monica (28) Bing were married five years ago, only months after graduating from Mount Royal University. Chandler recently received his BBA degree and is employed with a large manufacturing firm earning $72,500 per year and Monica has a degree in computer science and works in the IT field earning $78,000 per year. They estimate their after tax income to be about $56,700 and $60,600 respectively. Both feel that their job positions are secure. Chandler and Monica have a one year old child, Justin. Monica has just returned to work after a years maternity leave. They pay $800 per month in child care costs. They would like to have a second child within the next 3 years but they want to be in their own home before the child is born. The Bings currently live in a 3 bedroom townhouse in south west Calgary that they rent for $2,000 per month. Chandler and Monica have about $34,900 in a savings account. $15,000 was given to them by Monicas parents as a wedding present with the stipulation that the money be used as a down payment on their first home. They put the $15,000 into a savings account and they have been adding $300 per month for the past 5 years. They plan on buying a 3 bedroom home near the home they are currently renting. They expect to pay about $525,000 (in todays dollars). They want to buy the home in 2 years as they want another child in three years and they would like to be in the home before their next child is born. Monica drives an eleven year old Toyota Camry valued at $5500 and Chandler drives a four year old Toyota Tacoma valued at perhaps $21,000. Chandler purchased his Tacoma in January two years ago for $32,000. He financed the purchase with a six year $30,000 car loan at 5.9%. His monthly payment is $496 and his current balance is approximately $21,100. Monica and Chandler plan on replacing Monicas car with a minivan in three years. They will buy a slightly used van and expect to pay about $25,000 (in todays dollars). Chandler plans to replace his truck in five years. He also will buy a slightly used vehicle and expects to pay about $22,000 (in todays dollars). Chandler and Monica have student loan balances totaling about $8900. They pay $118 per month and the interest rate is 6.5%. They also have a $3,500 balance on a joint credit card from last summers vacation. They are paying $150 per month and the interest rate is 19.9%. Chandler has been contributing $300 per month to a RRSP account and his current balance is about $16,000. Monica works for the Alberta Government and is part of the LAPP Pension plan. She contributes 9% of her gross pay to her pension plan. She plans on retiring at age 60 with a full pension. The Bings monthly expense include; utilities $250, renters insurance $40, groceries and household stuff $1,200, clothes budget $250, haircuts and personal care $150, entertainment and eating out $450, health club membership and sports fees $225, hobbies $150, gifts budget $200, charity $100, travel budget $250, auto insurance $115, auto maintenance budget $100, auto fuel and oil changes $600, misc auto $25. The Bings have exciting plans for the future. They would like to purchase their 1st home in 2 years. They want to have a second child in three years when they are in their new home and Monica will want to take another year of maternity leave. They want to be in control of their financial future therefore they would like to get out of debt as soon as possible so they only debt they have going forward is their home. They want to be able to take family vacations without putting the trip on their credit card and then stressing over paying the balance off. They also want to be able to save for their vehicles in the future so they dont have to take on debt. In addition they know how valuable their university education is for themselves and they want to be in a position to pay for their childrens tuition for 4 years of university. The Bings feel good about how they have managed their money to date. However they are not sure what they should be doing to make sure they can achieve their goals and they dont really know if what they have been doing is what they should be doing. They have come to you looking for help in creating a financial plan.

1) Financial Goals a) Identify and provide commentary. b) Goals should be broken into: i) Short term goals ii) Intermediate term Goals iii) Long-term Goals c) Goals should be assigned priority (high/medium/low) 2) Evaluate the Current Situation a) Current Cash Flow, Net Worth Statement b) Commentary of the current situation financial and non-financial 3) Project Assumptions 4)Financial Plan a) Budget and Debt Management b) Risk Management (Insurance) c) Investment d) Retirement e) Estate 5)Implementation of Financial Plan a) List of action items, who will do them and by when b) Success Criteria i) How will you measure and gauge the plan 8) Revaluate and Revise as necessary a) Provide recommendations on the revaluation process. 9) Appendices a) Current CF, recommended budget b) Current NW c) Current GDS and TDS calculations d) Future Budget e) Future GDS and TDS calculations f) Retirement Calculations g) Investment Calculations h) Insurance Calculations