Planning for Wedding and First Home

You have just met with your newest clients, Dave Groom and Alica Bride. The recently engaged couple is getting married in two years and is planning to purchase a four-bedroom home in Clarks Summit, PA in five years.

Currently, John and Mary have no money saved, and expect no monetary assistance from their families. They would like to have a wedding reception for 200 guests, and they would like to spend a weeklong, all-inclusive honeymoon in Cancun, Mexico after the wedding. Dave and Alica also expect the following wedding expenses:

Wedding Dress	$1,100	Photographer	$3,000	DJ	$500
Cake	$300	Limousine	$300	Dress Rehearsal	$800

The future Mr. & Mrs. Groom have asked you to help them save for their wedding and first home. Thus, your task is to create a financial plan for this couple, which should include the following parts:

a)Introduction of Goals and Objectives

b)Discussion of Assumptions

c)Calculations and Recommendations

Within your Calculations and Recommendations, be sure to address:

1) What types of investments do you recommend and why? Specifically, what percentage of their savings should be assigned to each investment type? Should these allocation amounts change over time? Explain.

2) Using local data from several sources, estimate the cost of the wedding reception and of the honeymoon to Cancun. What is the total cost of the wedding and honeymoon? How much will the couple need to save each month in order to raise this amount?

3) Using real data, estimate the cost of a home. After the wedding, how much will they have to save each month in order to raise enough funds to make a 20% down payment?

Additional Information:

Expected Inflation Rate 3%

Expected Return on CDs 4%

Expected Return on T-Bonds 5%

Expected Return on Corporate Bonds 6%

Expected Return on Stocks 10%