Meet Paul and Rita Mitchell. Paul is a $50-$year$-$old successful graphic designer and Rita is a $49-$year$-$old counseling psychologist. They have a $16-$year$-$old daughter Nakita, who is in the eleventh grade, and a $15-$year$-$old son Josh, who is in the ninth grade.

The Mitchells have sent some summary information to your office as they seek a financial planner. While they feel they have made financial progress, they also have some concerns about the future. Your requirements are to assess the situation and provide initial thoughts to this potential client.

The Mitchells will be facing numerous challenges that will require them to practice sound financial decision$-$making, and, in instances where there is a sufficient time horizon, some prudent financial planning. Rita is currently finishing her master$$s program, so she might switch to private practice in a few years. She is enrolled in this program while she works four days per week at the school in her town. The Mitchells own a home, two cars, have savings and checking accounts at a local bank. They also own some assets around the house, and they are invested in their $401$k$$s that they maintain at their respective places of employment.

This couple is facing some financial issues that they have not yet addressed. Although they both have jobs where they make decent salaries, they have not really thought about their children$$s educational needs. Inflation in the cost of college education is a reality for most parents, which has to be kept in mind when planning for the future. Moreover, Rita$$s mother is in her late seventies, and has been facing declining health. She will not be able to live by herself for much longer. Paul, who originally hails from Costa Rica, sends money to his family regularly, but his parents are aging and may need more financial assistance in the future.

Lastly, due to the Mitchell$$s fairly hectic lifestyle, they have not given much thought to what would happen if one of them were to be laid off. Paul has had increasing concern recently that his company is struggling and may close, and the Mitchell$$s have health insurance through Paul$$s employer.

Net Worth Statement $($Balance Sheet$)$

Paul and Rita Mitchell

As of Dec $31,2023$

Assets

Checking

$$500$

Savings

$$2,000$

Investment Accounts

$$945,000$

House

$$625,000$

Vehicles

$$40,000$

Personal Property

$$5,000$

Total Assets

$$1,617,500$

Liabilities

Mortgage

$$488,000$

Credit Cards

$$1,745$

Car Loans

$$22,000$

Student Loans

$$4,910$

Total Liabilities

$$516,655$

Net Worth

$$1,100,845$

Income Statement

Paul and Rita Mitchell

Year Ending $12/31/23$

Revenue

Salary $-$ Paul

$$115,000$

Salary $-$ Rita

$$60,000$

Bonus $-$ Paul

$$13,000$

Total Revenue

$$188,000$

Expenses

Food

$$8,400$

Clothing

$$5,000$

Utilities

$$9,600$

Health Care

$$12,000$

Entertainment

$$5,600$

Regular Mortgage Payments

$$42,000$

Credit Card Annual Fee

$$300$

Vehicle Operation

$$4,200$

Home & Auto Insurance Premiums

$$3,700$

Charity

$$2,000$

Other

$$27,600$

Taxes

$$37,600$

Retirement Account Savings

$$30,000$

Total Expenses

$$188,000$

answer the following:

$\mathrm{.}1$ What are the areas of financial concerns that the Mitchells are currently facing?

$2.$ The Mitchells are making some financial decisions that will help them in the future. In your estimation, what are the sound decisions they$$ve already made?

$3.$ Do you support the idea of Rita continuing her education?

$4.$ Do you believe the Mitchells will agree on what to do in terms of their parents?

$5.$ You will want additional information from the Mitchells when they have their first meeting with you. However, they do not know what other information you will need. Prepare a set of $4-5$ questions that you would deem as being $$critical$$ during your first client meeting. The answers to these questions will allow you to begin preparing a financial plan for the client $$ yet without the answers, it will be difficult to complete a financial plan.

$6.$ Based on the family and financial information provided, advise the Mitchell$$s on one short$-$term financial goal.