Financial Planning Skills and Goal Setting

A couple, Jalil and Maisara have come to see you regarding their financial situation. Jalil works for a consulting firm earning RM80,000 per annum (take home pay of RM 6,400 per month after tax and other deductions). Maisara is currently a stay home mother taking care of their one-year-old child, which saves them in child care expenses of RM450 per month.Before having the baby, Maisara worked as an early childhood teacher earning RM45,000 per year (RM3,600.00 after tax and other deductions). They know that money has been tight and they have only saved RM3,000 in a current account.

Jalil and Maisara have provided the following information to you:

The couple are currently renting a house which is costing them RM450 per month.

They have two cell phones each on RM60 per month plans

Power bills estimated to be RM150 per month

Internet and phone plan cost them RM89 per month

They spend about RM150 per week on incidental expenses like clothing and entertainment

Food costs them about RM150 per week

Jalil buses to work with his monthly bus pass costing RM120 per month

The couple also have a car that they have just bought for RM15,000 with a 5-year loan at 14.75%. The car comes with costs of RM287.75 per year for registration and needs two warrants of fitness per year costing RM60 each

They spend RM100 per week on petrol

The car is now worth RM12,000

In terms of debt, they have RM7,000 of personal loan which they pay 151.67 per month.

They also recently replaced some household appliances and so have hire purchase debt of RM4,600 which is costing them $150 per fortnight in repayments for the next 3 years

Both the personal and hire purchase have interest rates of 22.5%

The value of their household items, including their hire purchase items is RM15,000

Jalil has accumulated RM1750 in his trust fund account.Based on the above information, calculate:

i)Jalil and Maisara's asset, liability and net worth

ii)Jalil and Maisara's personal income statement on a monthly basis.

iii) Identify areas of concern based on the results in (i) and (ii), advise them on ways improve their financial situation.

iv)Set one appropriate short-term financial goal for the couple and another long-term goal on purchasing a house at RM500,000 with a 20% deposit.