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The Goldsteins Risk Management and Insurance portfolio Table of Contents Page # Introduction Family Profile.................................................. 1-2 Home Risk: Homeowners Insurance................................................... 3 Automobile Risk: Auto Insurance................................................. 4-6 Mortality Risk: Life Insurance.................................................. 7-8 Accident & Illness Risk: Health Insurance............................................... 9 Disability income insurance................................. 10 Longevity Risk: Retirement Plan................................................ 11-12 Long Term Care risk: LTC Insurance.......................................................... 13 Incurred Insurance Losses Unexpected Accident.......................................... 14-15 Budget Analysis Insurance Coverage analysis................................... 16-17 Conclusion.............................................................. 17 Introduction & Family Profile The Goldsteins Family Members: Robert Goldstein: Age 47 Emily Goldstein: Age 45 Jason Goldstein: Age 16 Rebecca Goldstein: Age 14 Careers: Robert works as the managing director in the investment management division at Morgan Stanley in New York, NY. Robert earned his undergraduate degree in economics from the University of Pennsylvania in 1987, after which, obtaining a job as an analyst at JP Morgan within their investment banking division. In 1990, Robert returned to school, completing his MBA from Harvard University. After obtaining his MBA, Robert got a job at Morgan Stanley as an associate in the Investment Management division in 1994. Since then, Robert has worked his way up the ladder at Morgan Stanley and is now the managing director for his division. His current salary is $100,000, excluding bonuses and other compensation benefits. Emily graduated from Harvard University with a graduate degree in psychology in 1992, during which time she met Robert. After getting married, Emily began working on her post graduate degree at Columbia University, focusing on neurobiology and behavior. However, after the birth of Jason in 1995, Emily decided to become a homemaker and take care of the family. Bank Account: (as of May 01, 2011) Savings.............................$151,000 Checking...........................$48,225 Credit Card Balance............. ($5,011) Income Breakdown: Actual Pay Check Results Bi-monthly gross pay Federal Withholding Social Security Medicare Virginia Tax $4166.00 $666.67 $299.95 $60.42 $218.72 Bi- Monthly Net Pay Monthly Net Pay $2,920.24 $5,840.48 Calculation Based on Tax Year Gross Pay Pay Frequency Filing Status Federal Exemptions 2014 $100,000 Bi-monthly Married 3 Annual Net Pay $70,085.76 ASSETS Automobiles 2009 BMW 335xi, Black, 4 door sedan, 6 Cyl 3.0 liter, 27,550 miles Car fully owned Robert is the primary driver 2006 Range Rover Sport, 4 door SUV, 8 Cyl 4.2 liter, 45,545 miles Car fully owned Primary driver is Emily 2010 Porsche 911 Turbo S, 2 door coupe, 6 Cyl 3.8 liter, 5,550 miles Car fully owned Primary driver is Robert Home The Goldsteins moved into their current home in 1997, which was 5 year old at the time. It is located in a subdivision of a large residential neighborhood outside of Washington D.C in Northern Virginia, and is approximately 275 feet from the nearest fire hydrant. The Address of the home is: 47148 Kentwell Pl Sterling, Virginia 20165. Amenities: Gas Fireplace Granite Countertops Stainless Steel Appliances 5,300 sq ft Purchase Price: $599,900 Down Payment: $119,980 Loan Amount: $399,920 30 year fixed rate at 4.42% Discount points .00 Asphalt Shingle Roof 5 Bedrooms 4 baths Security System Cul-de-sac 3 Car garage Monthly payment: $3,009 Monthly real estate taxes: $480 THE HOME IS WAY TOO EXPENSIVE FOR THIS FAMILY! Home Risk: Homeowners Insurance Homeowner Insurance Analysis: The Goldsteins have decided to get home insurance because they live in a large single family home in an affluent part of Northern Virginia. It makes sense to obtain insurance because the Goldsteins house is quite valuable, largely due to it specific features and amenities but also due to its location. The Following table represents the possible Home Insurance solutions for the Goldsteins: Company Coverage A: dwelling replacement Coverage B: Other Structures Coverage C: Personal Property Coverage D: Loss of Use Coverage E: Personal Liability Deductible Endorsements for collectibles & Inflation guard Annual Premium A.M. Rating S&P rating State Farm Insurance $600,000 $60,000 $420,015 $180,000 $500,000 1%, $6,000 Yes $1,424 A++ AA Geico Insurance $599,900 $59,990 $419,930 $179,970 $500,000 $1,000 Yes $1,415 A++ AA+ The amount of insurance that the Goldsteins selected was 100% of its estimated replacement cost, which is $599,900. The reasoning behind the Goldsteins choice in covering the entire replacement cost is because they can easily afford the payments based on their income level. Additionally, they like the feeling of security that full coverage entails. The Companies that the Goldsteins chose between were two well known insurers; State Farm and GEICO. They chose these companies based on their excellent ratings. Both companies are highly secure and have the top A.M rating of A++. In addition, both have very strong S&P ratings of AA or better. Because the Goldsteins are incredibly busy do to their lifestyle, they found it more convenient to find insurance quotes from online vendors. This also allowed them to save time and money because they didn't have to directly deal with an Agent. The final rate was $1424 for State Farm, including the premium and saving. The final rate for GEICO was $1415. The Goldsteins chose to buy their home insurance from GEICO due to the fact that the premium was cheaper and because it's S&P Rating was higher. Additionally, GEICO only required a $1000 deductible, opposed to State Farm which charged 1%, or approximately $6000. Automobile Risk: Auto Insurance Auto Insurance Analysis: The Goldsteins have decided it would be a smart idea to obtain auto insurance because of the risk associated with the uncertainty of driving. Another factor that contributed to their choice in obtaining auto coverage is due to the fact that they own three highly valuable vehicles. Robert drives a 2009 BMW 335xi sedan, for the purposes of commuting to work and errands around town. Robert is also the primary driver for his personal sports car which is a 2010 Porsche 911 turbo S. Emily is the primary driver of the families SUV, which is a 2006 Range Rover Sport. Emily primarily uses her vehicle to run errands around town and to transport her kids, Jason and Rebecca to school. The following table breaks down the auto insurance policies the Goldsteins could choose from and displays the particular costs along with benefits that would result, given the insurance provider: Auto Insurance coverage's Insurance Providers: Liability Coverage Bodily Injury Property Damage Medical Expenses Income Loss Under/Uninsured Motorist Bodily Under/Uninsured Property Damage Esurance Progressive $100,000/$300,000 $100,000 None None $100,000/$300,000 $100,000 None None $100,000/$300,000 $100,000/$300,000 $100,000 $100,000 Vehicle Coverage BMW 335 XI Limits & Deductibles Other than Collision Collision Transportation Expense Roadside Assistance Range Rover Sport Limits & Deductibles Other than Collision Collision Transportation Expense $500 $500 $500 $500 None None $600/occurrence None No Coverage No Coverage $500 $500 None $600/occurrence Roadside Assistance Porsche 911 Turbo S Limits & Deductibles Other than Collision Collision Transportation Expense Roadside Assistance Monthly Premium Annual Premium A.M. Best Rating S&P Rating None $75/disablement $500 $500 $500 $500 none none $228.58 $2,742.96 $600/occurrence None $260.06 $3,120.72 AN/A A+ AA The coverage that the Goldsteins chose was a policy that provided $100,000 for bodily injury per person and $300,000 per accident. They also chose to get $100,000 worth of coverage for property damage. For uninsured and underinsured motorists, the Goldsteins chose to get a $100,000/$300,000 coverage for bodily injury and $100,000 coverage for property damage. However, the Goldsteins did not choose to add coverage for medical expenses and income loss. They did not find it absolutely necessary and already have alternative insurance policies that cover those circumstances. The Companies that the Goldsteins chose between were two well-known insurers; Esurance and Progressive. They chose these companies based on their strong ratings. Progressive has an overall better rating, with an A.M Best rating of A+ as well as an S&P rating of AA. Esurance has a lower A.M Best rating of A- and does not have an S&P rating. Because the Goldsteins are incredibly busy do to their lifestyle, they found it more convenient to find insurance quotes from online vendors. This also allowed them to save time and money because they didn't have to directly deal with an Agent. The particular coverage that the Goldsteins chose was provided by Progressive. A number of factors went into the Goldsteins choice in picking progressive, rather than Esurance. If you observe the monthly premiums provided by the table above, you will see that Esurance was cheaper, but did not provide as many benefits as Progressive. Esurance's rate came to $228 per month and $2,742 annually, but Esurance did not offer such amenities as road side assistance and transportation expenses. As well, Esurance did not provide any collision coverage for the Goldsteins Range Rover. Progressives rates were $260 a month and $3120 annually, however they provided coverage for Emily's Range Rover along with amenities such as road side assistance and transportation expenses. Also, Progressives overall ratings were higher than Esurance. Mortality Risk: Life Insurance Mortality Risk Analysis & Insurance Options The Goldsteins have chosen to purchase life insurance on Robert due to his important financial role in the family. Because Emily does not hold a job, it is especially critical that coverage is purchased on Robert incase something happens to him. The family currently has many expenses, such as monthly mortgage payments, other insurance payments along with the costs of raising two kids. The following breakdown represents the estimated coverage the Goldsteins would need if Robert passed away: Required Life Insurance allocation: Loans, mortgage or rent, and other debts: $582,728.00 Income Replacement: $1,200,000.00 Final Expenses: $35,000.00 Education: $200,000.00 Your Total Life Insurance Need: $2,017,728.00 Less Existing Life Insurance: ($0.00) Less Other Assets: ($500,000.00) Additional Life Insurance Needed: $1,517,728.00 The chart above represents the Goldsteins expected needs, given Roberts death. The calculations were primarily derived from the Goldsteins need to pay off remaining amount of their mortgage, college education for both Jason and Rebecca along with an annual income replacement of $100,000 to maintain the life style the Goldsteins are currently accustomed to. The Goldsteins chose a lower than expected income replacement due to the fact that they have a large amount of alternative investment along with a retirement account that has already been accumulating funds for a number of years. Given Roberts's profession and interests in fully utilizing his money, he holds $500,000 in alternative investments. The majority of his investments are held in stocks and foreign currencies, which could be liquidated if, need be, given an emergency. On the next page there are three potential life insurance plans that the Goldsteins are considering. They are currently looking at a 30 year Term and universal life insurance package, being offered by a number of different insurance companies. THIS IS PROBABLY TOO MUCH LIFE INSURANCE! NEED A MORE REALISTIC CALCULATION OF NEED, WHICH MUST BE BALANCED BY WHAT THEY CAN AFFORD Company Policy Type Policy Coverage Annual Payment Monthly Payment A.M Best Rating S & P Rating Prudential Life Universal life $1,500,00 $11,040 $920 A+ AA- Farmers Insurance 30 Year Term $1,517,728 $8,192.76 $634.73 B+ A West Coast Life CORP Universal Life 1,700,000 $12,448.92 $1,037.41 A+ AA- The three companies the Goldsteins investigated were Prudential Life, Farmers Insurance and West Coast Life CORP. However, after close analysis of the different coverage's being offered, the Goldsteins decided to go with West Coast Life. The Goldsteins like the flexibility Universal life insurance offers. Also, West Coast Life provides the closest amount of coverage they were looking for at a reasonable price. Because Robert expects to live a long life due to his healthy life style and access to excellent medical care, he finds it better to purchase a universal life insurance policy that will stick with him the rest of his life, rather than a 30 year term policy that will expire when he turns 77. The Goldsteins went with a Universal Life insurance policy because they are attracted to the competitive investment features and flexibility to meet their changing consumer needs. Robert also likes the transparency of the policy, brought by the disclosure statement. This allows Robert to specifically look at his gross rate of investment return, charge of death protection, expenses and the resulting changes in the cash value of his policy. Among the Companies that were selected, the A.M Best rating and S&P rating varied. Prudential Life and West Coast Life CORP had the best ratings; which were an A+ rating for the A.M best and an AA- for the S&P Rating. Farmers Insurance had significantly lower ratings in both categories; a B+ rating for the A.M Best and an A for the S&P Rating. Farmers lower insurance ratings also played a part in picking West Coast Life for the Goldsteins insurance needs. The rates for these life insurance policies were collected online from the company's web sites. The Annual and Monthly payments varied for each life insurer. The annual cost of universal life insurance from Prudential came to $11,040 with monthly payments of $920. The annual cost of a 30 year term insurance policy from Farmers came to be $8,192 with monthly payments of $682. Lastly, the annual cost of a universal life policy from West Coast Life CORP came to $12,448 with monthly payments of $1037. Taking the fact that all of the coverage's among the companies that were researched were mildly different, the Goldsteins are still choosing to go with West Coast Life, despite its higher annual premium. Ultimately, West Cost Life provides the closest amount of coverage the Goldsteins are looking for and has the most desired financial ratings. Accident & Illness Risk: Health Insurance The Goldsteins have decided to obtain Health Insurance to help maintain the family's general health and so they will be covered in case a medical emergency. The Goldsteins chose from two different well known health insurers; Anthem and Optima Health. Additionally, both Insurers are members of a PPO network. The following table illustrates the coverage's of both health insurers: Plan Type Deductible Coinsurance Max. Out of Pocket Hospital Inpatient/outpatient services Outpatient Surgery Doctor Visits Prescription Drugs Emergency Care Basic Monthly Premium Annual Premium A.M. Best Rating Health Insurance Options Anthem Optima Health PPO PPO $500 $2,000 20% 20% $5,000 $6,000 20% or, 0% after coinsurance 20% or, 0% after coinsurance $30 PCP, $40 Spec 20% coinsurance 20% coinsurance $0 $30 Co-pay $250 deductible, $30 Copay 20%, or 0% coinsurance 20% coinsurance $727 $8,724 A $683.56 $8,202 NR-5 Because the Goldsteins are incredibly busy do to their lifestyle, they found it more convenient to find insurance quotes from online vendors. This also allowed them to save time and money because they didn't have to directly deal with an Agent. The two companies that were selected had two very different A.M Best ratings. Anthem had an excellent rating of an A. Whereas, Optima Health did not have a rating currently, however in the past they have had a rating of an A, as well. Ultimately, the Goldsteins chose to purchase their health insurance through Anthem, rather that Optima Health. Anthem seemed like a much better pick overall, which was largely based on the amenities of the plan. Anthem may have had a slightly higher premium of $727 opposed to $683 from Optima. However, the plan featured by Optima had a much higher deductible and the general cost in the long run seemed to be greater. Also, the fact that Optima is not currently rated on the A.M Best raises red flags that made the Goldsteins suspicious. Accident & Illness: Disability Income Insurance Mr. Goldstein has decided to obtain disability insurance in case he is injured and can no longer work. Although it is unlikely that Mr. Goldstein will become disabled, he wants the security of a steady income in case something bad was to occur. The chart below contains the information of two insurers offering coverage to Mr. Goldstein for disability insurance: A.M Best Rating Monthly Benefit Benefit period Waiting period Monthly Premium Renewable Policy Cost of Living Increase Prudential A+ $18,512 To Age 60 90 Days $2,644.00 Yes Met Life A+ $17,189 To Age 60 90 Days $2,320 No Yes Yes The two quotes were provided by two well known insurance companies websites; Prudential and Met Life Insurance. Additionally, both Prudential and Met Life had excellent A.M Best ratings of an A+. The premiums offered by the two companies differed slightly due to a difference in the calculation of benefits and premiums. Met life insurance had a monthly premium of $2,320, which was lower than Prudential because Met Life only replaced 65% of Mr. Goldstein's income. However, because Prudential replaced 70% of Mr. Goldstein's income his monthly benefit is a bit higher. Additionally Prudential included a renewable policy option that Met Life did not include. Ultimately, Mr. Goldstein decided Prudential was the company he wanted to insure with because of the renewable policy option that Met Life did not include. Mr. Goldstein decided he might as well pay for a renewable policy, just in case he decides he needs the option in the future. The high premium for disability coverage does bother Mr. Goldstein and even though it is unlikely that he would have to collect from his policy he values the security it brings him. Longevity Risk: Retirement Plan Due to Mr. Goldstein's job, along with his interest in actively managing his money, he has already began saving for his retirement. He currently has two separate retirement accounts that he is contributing to for his future. The first is a 401(k) plan that he went into when he joined Morgan Stanley roughly 15 years ago. The second retirement account Mr. Goldstein contributes to is a Roth IRA he set up when his daughter Rebecca was born in 1997. The following table represents the 401(k) plan offered to Mr. Goldstein when he joined Morgan Stanley in 1994. Mr. Goldstein's 401(k) account has been factored by an estimated salary increase rate of 7%, an employer contribution rate of 100% and expected average return of 8%. Also, the table below is based on Mr. Goldstein deferring the maximum amount of income allowed for any given year. In 2010 and 2011 it was $16,500. 401(k) Summary Your Contribution: 3.67% Employer Match Rate: 100% Percentage of Contribution Employer Matches: 100% Investment Rate: 8% Salary Increase Rate: 7% Value of Your 401(k)Plan in 17 Years: $1,214,441.65 As the table shows, Mr. Goldstein has currently accumulated about 1.2 million solely from his 401(k) investment through Morgan Stanley. Mr. Goldstein decided around the time of his daughter's birth that he wanted to start a second retirement account. He decided to open a Roth IRA to ensure that he and his wife would be able to maintain the life they are currently accustomed to, after retirement. The following table breaks down his Roth IRA account. Additionally, Mr. Goldstein has chosen to defer the maximum amount allowed by the federal government, $5000 annually. Roth IRA Summary Account start year Expected Withdrawal Expected Annual Rate of Return Yearly contribution Value of your Roth IRA Account 1997 Age 60, 2025 12% $5,000 $953,494.44 Mr. Goldstein's expected annual rate of return for his Roth IRA is relatively high for most people, especially considering the average stock market return is around 6%. However, because he is so well connected within the financial world and knows the fundamentals of how our world markets function, he has been returning a higher rate than the average retirement saver. Given the two different retirement accounts Mr. Goldstein has contributed to, his current accumulated retirement savings is roughly 2.1 million. Mr. Goldstein is currently contributing a combined total of $21,500 per year for both his 401(k) and his Roth IRA accounts. NOTE THAT THIS IS INSUFFICIENT BECAUSE IT DOES NOT DISCUSS WHAT IS ACTUALLY NEEDED FOR RETIREMENT BUT SIMPLY CALCULATES WHAT WOULD BE AVAILABLE BASED ON CURRENT SAVINGS. ALSO, AMOUNTS LISTED FOR SAVINGS ARE NOT REALISTIC BASED ON INCOME AND EXPENSES Long Term Care Risk: LTC Insurance The Goldsteins have opted not to get Long Term Care insurance because they are already well insured. They have comprehensive medical insurance that covers any health issues that may arise. They also have disability insurance that will cover any issues that are more serious and long term. Another reason the Goldsteins have opted out of LTC insurance is because they have a strong savings account and a large amount of assets held in alternative investments. If something serious were to happen, and it was not covered by the insurance they already had, they would likely be able to pay the remaining expenses out of pocket. A final reason that the Goldsteins have opted out of LTC insurance is because both Robert and Emily are in very good health. Both Robert and Emily work out regularly, eat balanced meals, regularly take essential vitamins and see their doctor periodically though out the year, to check on their general health. Given these circumstances, the Goldsteins do not find it necessary to add an extra insurance policy to their insurance portfolio. DEDUCTIONS WERE MADE HERE BECAUSE THE GROUP DID NOT GET QUOTES BUT TOOK THE EASY WAY OUT BY SAYING THEY WOULD HAVE ENOUGH MONEY. DO NOT SIMPLY SAY THAT LTC WAS NOT NEEDED BECAUSE THE FAMILY WAS IN GOOD HEALTH! Incurred Insurance Losses 1. Automobile Accident & Unexpected Health Complications On June 18, 2011 Mrs. Goldstein and Rebecca got into an auto accident when a drunk driver t-boned the side of their Range Rover. They were on their way home after picking Rebecca up from a friend's house at approximately 10:30 P.M. At a residential intersection, a traffic light turned green for Mrs. Goldstein and she proceeded at about 25 mph through the intersection. During this time, Mrs. Goldstein was suddenly side swiped as a drunk driver collided with their Range Rover, at approximately 60 mph The impact from the driver's car caused severe damage to the entire driver's side of the car. The most damage occurred between the front door and wheel well, however, due to the collisions point being within close proximity to the driver, Mrs. Goldstein was critically injured. Upon impact, Mrs. Goldstein smashed her head against the driver's side window, causing a serious concussion along with multiple fractures around her head. Also, due to the intensity of the accident, it is likely that Mrs. Goldstein will suffer from complications associated with whip-lash. Rebecca only suffered minor injuries, such as a few scrapes to the face. It is unknown how Rebecca's mental health will be due to the severity and conditions involving the accident. The drunk driver who t-boned Emily's range rover was not wearing a seatbelt upon collision and consequently flew through the front window and landed about 25 feet north of the accident. The intensity of the crash caused the drunk driver to be killed upon impact as he hit the pavement. After being informed by the paramedics, Mr. Goldstein rushes to the scene to help his wife and daughter since they were close by. Currently, Mrs. Goldstein is still in critical condition at a hospital close to the Goldsteins house and the doctors are uncertain of her fate at the moment. At this point Mr. Goldstein has initially reported the incident to his auto insurance agent and is awaiting a call back. As Mr. Goldstein began to sort through the accident, he came upon a couple factors that seriously complicated the situation. Unfortunately, the drunk driver was an individual who had no auto insurance. Additionally, he rented an apartment and had no valuable financial assets to his name or much of anything, for that matter. This makes it difficult to collect adequately for the damage caused to the vehicle and more importantly, Mrs. Goldstein. Due to the conditions of the crash, Mr. Goldstein is trying to collect on his auto policy, under the uninsured driver provision. Progressive, the Goldsteins auto insurer got back in contact with Mr. Goldstein on Monday morning, informing him that his policy will cover the actual cash value of the vehicle and up to $100,000 in medical expenses for Mrs. Goldstein. Also, because of the nature of the incident, along with Mrs. Goldstein following all expected driving rules, there will be no increase in the annual premium they must pay. Unfortunately, the Goldstein's run of bad luck was not over yet. About 4 days after the accident, the doctors informed Mr. Goldstein that Mrs. Goldstein would need surgery to drain a spot near her brain where the primary damage occurred. The doctors continued by explaining that there were some bone fragments left from the skull in this area and that the procedure would be very expensive due to the precautions they would have to take treating a high risk area such as the brain. After some time discussing all viable options with the doctors, Mr. Goldstein received the projected expense bill. All in all, including time spent in the hospital, costly medical tests and other expenses associated with the Mrs. Goldstein's stay, the bill came to $260,000. At this point, Mr. Goldstein realized that the amount of coverage from his auto insurance policy wouldn't cover the total expenses charged by the hospital. Luckily, Mr. Goldstein has medical insurance and proceeded to contact them to report his claim. Due to the coverage Mr. Goldstein purchased, all the remaining amount of medical expenses were covered by his medical insurer. After the surgery, and an additional week of recovery it appears that Mrs. Goldstein had recovered for the most part. The doctors informed the Goldsteins that future complications may be likely and that they should keep a close eye on Mrs. Goldstein. Unfortunately, due to the severity of the accident and uncertainty related to Mrs. Goldstein's overall health, Anthem increased the Goldsteins rates. The Goldsteins premiums increased from $727 to $785 per month. THIS WAS DONE WELL Budget Analysis & Conclusion Given the above insurance coverage's for the Goldsteins, you can see that the total annual cost is $7,449 more than their income. The Goldsteins annual net income is $70,085 and their annual insurance cost is $77,534. This can be illustrated by the charts below: Home Auto Life Health Disabilit y 401(k) Roth IRA LTC cover Total Monthly Insurance Cost/ Contribution $118.00 Annual Insurance Cost $1,415.00 $260.00 $3,120.00 $920.00 $727.00 $11,040.00 $8,724.00 $2,644.00 $1,375.00 $417.00 $31,735.00 $16,500.00 $5,000.00 $0.00 $6,461.00 $0.00 $77,534.00 Insurance as % of Net Income 77,534; 20% Annual Net Income Annual Insurance Cost 317,354; 80% Ultimately, the Goldsteins have decided find a way to get these insurance coverage's because they seek financial stability for their family and want to be completely prepared if any unexpected event were to occur. Also, it makes sense for the Goldsteins to have the coverage even though they cannot afford to do so. REALLY! LOGIC? As you can see below from the chart, the Goldsteins insurance cost is approximately 106% of their monthly income. This is a little more than half of the total expenses the Goldsteins pay every month. Analyzing the Goldstein's monthly budget breakdown you can infer that insurance holds a significant weight given their income allocation. However, despite the high cost that all their insurance coverage's accumulate to, the Goldsteins are glad they are so well protected. Due to the Goldsteins comprehensive insurance plan they are not worried about any future perils they might encounter. Monthly Budget Breakdown Net Income $5,840.00 Expenses Mortgage Payment $3,009 Insurance Cost $6,461 Food Costs $1,500 Other Bills $1,000 Total Expenses $(6,130) Remaining Income 40% to Savings 60% to Checking's $0 $0 $0 MISTAKE! THE FAMILY COULD NOT AFFORD THE INSURANCE! ALSO, THE EXPENSES NEEDED MORE DETAIL. \"OTHER BILLS\" NOT ADEQUATE Monthly Budget Break down 1500; 4% 1000; 3% 3009; 8% 6461; 17% 26446; 69% Remaining Income Insurance Cost Mortgage Payment Food Costs Other Bills