CLIENT SITUATION

The people: Tom, 33, and Laura, 35

The problem: Sorting out a seeming crush of financial demands.

The plan: Put one foot after the other, financially speaking. Pay off the high-interest loan, then use the increased cash flow to pay off the next one. If they have a child, draw on non-registered savings during maternity leave.

The payoff: A clear road map to achieve their financial goals so they can stop worrying.

Monthly net income: $7,740

Assets: Residence $450,000; her TFSA $1,060; her RRSP $7,437; his RRSP $7,791, joint non-registered account $11,860. Total: $478,148

Monthly disbursements: Mortgage $1,530; home insurance $56; property tax $463; water, sewer $32; heating $65; hydro $65; telecom $205; car insurance $125; club membership $80; groceries $600; gasoline $340; dining, entertainment $275; personal care $65; pet care $50; home maintenance $50; vehicle maintenance $50; clothing $100; gifts, charitable $62; sports, hobbies $73; subscriptions $10; consolidation loan $940; line of credit $400; car loan $480; her TFSA $200; her RRSP $200; his pension plan contribution $500. Total: $7,016. Surplus $724

Liabilities: Mortgage $335,500; line of credit $12,140, consolidation loan $34,500, car loan $13,700. Total: $395,840

First big job, new house, kids on the horizon - and deeply in debt. That's how things are for Tom and Laura, a couple in their 30s who have competing places for their paycheques to go.

He earns $70,000 a year at a job that will give him a defined-benefit pension one day. She makes about $50,000 a year working two jobs.

Their short-term goals are to lower their debt load and pay for some household improvements - a deck, a shed, a fence, air conditioning and the like - and to buy a new used car. They would like to have children, so they'll be facing a cash-flow squeeze. Longer term, they worry about saving for Laura's retirement because she has no work pension.

"We're looking for any advice to increase our net worth and reduce our debt," Tom writes in an e-mail.

Questions

1. Conduct Insurance Needs Analysis and review the quality of current insurance coverage

2. Recommend insurance planning steps with justification