Prepare a current balance sheet and a cash flow statement for your next meeting with the Swensons. Date the net worth statement October 21, 2019 and complete the cash flow statement for the year ending December 31, 2019.

FROM THIS INFORMATION:

You learned that Ronald is 34, Tamara is 36, their daughters, Zoey and Ivy, are 5 and 3 respectively, and their son, John, is 1 year old. Tamara earns $201,000 per year as a dermatologist, while Ronald is a middle school principal and earns $93,000 annually.

They each contribute to their pre-tax retirement accounts. Ronalds is a 403(b) plan with a dollar-for-dollar match on the first 3% of income contributed, and a 50% match on the next 3% of income contributed. Tamaras plan is a 403(b) with a $0.50 on the $1.00 match on up to 5% of her income. They are both currently contributing 2% of their salaries to their retirement plan (this was the default when they were hired). Both are fully vested in these plans, and they have had good success with the returns from their mutual funds in their tax-deferred accounts with an average annual rate of return of about 6.5%. In addition to retirement contributions, other payroll deductions include Social Security (FICA - 6.2% of earned income up to maximum annual earnings of $132,900 in 2019, plus 1.45% of all earned income for Medicare), and federal income tax. Their federal income tax withholding is 18% of their gross salaries, and this has historically

been very close to equaling their tax liability. Ronald, Tamara, Zoey, Ivy, and John are all covered under Ronalds health insurance plan from work because his plan is superior to Tamaras employer plan. His monthly payroll deduction for health insurance is $484.

By way of assets, the Swensons have a joint checking account with a balance of $4,132. Their respective 403(b) balances are $42,382 (Tamara) and $39,888 (Ronald). Neither owns stocks outside of their retirement accounts. Tamara and Ronald have a joint rainy day savings account with $3,126 in it, and Tamara owns a money market account with a balance of $18,026. About a year ago, Ronalds father passed away and he received a life insurance settlement of $95,000. Ronald put this money in a money market mutual fund as he and Tamara would like your help in deciding how to best use it to meet their goals. The current balance is $98,838. Ronald has a small woodworking shop at the house and the tools and materials are valued at $4,700. Tamara owns a set of paintings she inherited from her grandmother which cost a total of $11,000, and was recently appraised for property insurance purposes at $13,150, but which she believes would only fetch $12,000 if she had to sell it today. Ronald also owns a life insurance policy on his life with a face value of $150,000, a current cash value of $6,300, and an annual premium of $3,325. He also has term life insurance with a face value of 2.5 times his salary that his employer pays for. Tamara has a $500,000, 20-year term life insurance policy through her employer that costs $24.50/month.

Ronald and Tamara own their home in Lubbock, Texas, currently assessed for property taxes at $385,000, and aggregate property taxes run 2.25% of taxable value annually. Their original mortgage, taken out three years ago, was for $273,000 financed for 30 years at 4.75%. Their monthly mortgage payment for principle and interest is $____, and after making 35 monthly payments their current mortgage balance is $______. The annual cost of their homeowners insurance is $2,320. In their home, they estimated that their home furnishings are currently worth $93,000, including their home exercise equipment that they just purchased in June (which cost them $2,700).

Ronald drives a 2015 Ford F-150 with a blue book value of $16,000 (fully paid for), while Tamara just bought a 2019 Toyota Highlander Hybrid in April that cost her $37,500. She was miserable when she at the urging of her husband checked her new cars blue book value and saw that her cars value had depreciated to $29,750 in the short time she had the vehicle. Her original loan was $35,000, financed for 5 years at 3.85%. Her monthly payment is $____ and she made her first payment on her loan at the end of June. Ronald also owns a camper trailer, which he thinks is worth $7,250. He bought it about three years ago for $8,000, financed it for 5 years at 6.25%. He still owes $______ on the camper trailer after 37 payments, and his payments are $______ month. Ronalds combined vehicle insurance averages $167/month, while Tamaras auto coverage is $159 monthly.

The Swensons typically spend $1,150 a month on groceries, $450 a month eating out, $1,300 a month for child care, $600 each month on entertainment, and $5,300 each year for clothing. Auto maintenance typically costs them about $900 a year, and they average $240/month in gas. Total utilities (electricity, gas, water, and cable) average $820 per

month. Out-of-pocket medical expenses are $1,450 annually. They spend about $2,800 on gifts annually, and $3,600 each year on charitable contributions.

At the moment, they have a couple credit cards with balances they are trying to get paid off. Their aggregate monthly credit card balance is $32,000, and they regularly pay $1,280 each month in credit card bills. All new credit card purchases are now paid off upon billing. A few years ago, they started a college fund for Zoey, Ivy, and John, and contribute $500 each month in the Texas College Savings 529 Plan; the account balance is now $24,375. Ronald has an outstanding student loan with 6.8% interest rate that has a term of 25 years. He has made 94 payments and his monthly payments are $305. Tamara has an outstanding student loan with 6.4% interest rate that has a term of 25 years as well. She has made 76 payments and her monthly payments are $1,265.