Financial Planning (Research Paper Sample)

Financial Planning
Student Name
Instruction Affiliation
Date
Financial Planning
Jefferson and Maria Gates.
Maria and Jefferson have been married for three years now. They are great spenders of cash with all the travelling they do. They recently met their mutual friend who is married to and had a deep conversation about their future plans and investments. Maria and Jefferson had some reflections on their future plans but in terms of finances they realized they are not well off and needed some financial advice to help them achieve their future goals.
Personal Background Information
Maria Gates (age 26)
Maria Gates is a vetinarian at a local vetinary shop. She graduated with Bachelor Degree in Vetinary four years ago. She comes from a middle class family but wants to move from that level and create a better home for her children in future when her and her husband get some. She has a side job as a baker.
Jefferson Gates (age 29)
Jefferson comes from a middle class family too. He has Bachelors’ Degree in accounting. He works for a firm, Jim & Jim. It has been seven years now and is a rising manager in the company. He has been married to Maria for three years now.
Moses Kim (age 20)
Moses is an employee of the Gate’s. He takes care of the house when they are home or travelling. He cleans the house, takes care of the garden and the swimming area in the house they rent for $1000 monthly. He is a student at a local university. He is given a roof over his head in exchange of the work he does and gets $80 a week in cash. He works for 40 weeks annually.
Family
Both Maria and Jefferson have no extended family they are liable to. They both lost their parents.
Plan
Jefferson and Maria are planning on buying their own house in the next two years. They then want to have their first kid a year after having their own place to call home.
Jefferson’s salary annually is $80,000 and Maria’s, $90,000. They have a total of $20,000 as savings in their saving account. Jefferson engages in the 401(k) plan at his work place. Jefferson owns a BMW car that he inherited from his father that is worth &90,000 and Maria owns a small house that is far from where they work and is worth $70,000.
Insurance information
Both Maria and Jefferson have a health and life insurance. They both have no disability insurance. Jefferson has an automobile insurance.
Below is a statement of the net worth and cash flow for the Gates.
Statement of Net Worth
Assets
Current $20,000
center21844000Intermediate $160,000
Total assets $180,000
Liabilities
Current $3,200
center32829500Intermediate $ 12,000
Total liability $ 15,200
Net Worth $164,800
Statement of Cash flow
Jefferson and Maria Gates
Cash inflows
Salary-Maria $ 7,500
Salary- Jefferson 6,700
Bakery- Maria 4,000
322897526670000Saving account withdraw 2,500
Total inflow $ 20,700
Cash outflow
Food $ 7,500
New clothes 6,000
Entertainment 8,000
Miscellaneous 3,200
Auto insurance 3,500
Utilities 2,500
Property taxes 1,200
Plan saving:
Jefferson 900
Maria 900
Education loan 1,500
361950026606500Credit card payment 2,200
Total outflow $ 37,400
For Jefferson and Maria to achieve their goal, they need to spend less and start saving more money so that their cash inflow is more than the cash outflow.
Client Engagement Letter
Re: Financial Planning
Dear: Mr. and Mrs. Gates
The main purpose of this letter is to reaffirm our conversation that we had on 5th of March 2021 that I, James Warren, will help you in your financial planning.
The billing of the work is $30 per hour in every meeting for the services I provide. You are expected to pay after every meeting and not pay after the service. In case of any inquiry, you can contact me on my email, HYPERLINK "mailto:jameswarren@gmail.com" jameswarren@gmail.com.
It is impossible to know how long this matter will take but I will provide a general frame work of the estimated time.
Very truly, James Warren.
CURRENT SITUATION
Name(s): Client 1: Jefferson Gates Client 2: Maria Gates
Address: 3678 Anderson Street
Telephone Numbers:
Client 1: Home: 022 3736 2837 Cell: 022 1872 2873 Work: 022 3637 3873
Client 2: Home: 022 3736 2837 Cell: 022 3748 3637 Work: 022 3736 9477
Email addresses: HYPERLINK "mailto:gates24@gmail.com" gates24@gmail.com
Date of Birth: Client 1:08/04/1995Client 2: 07/07/1992
Employer and Occupation:
Client 1: Jim & Jim, senior accountant
Client 2: Anderson Vet Corporation, senior vetinarian
Medical or mental concerns: Jefferson and Maria have no case of any medical problems or any detected mental issues.
Goals Worksheet
The big picture
Have a family home in the next five years and have a kid, have enough savings in the account, and also finish paying for the education loan.
Reason for the goal
To reduce on spending and more in saving to ensure financial stability even in old age.
Five year goal between 2021-2026
More money in the savings account
Have a child
Have a family home
Habits to change
Travel less unless necessary
Avoid overspending on food
Avoid overspending on clothes
How to change this behavior
Plan on when to go for trips and avoid impromptu trips
Saving regularly
Spend money only when necessary
Analysis of current situation
Strengths
The clients being young and having no children it is going to be easier for them to save for they do not have so many financial responsibilities and also due to the fact that they do not have any other family member they are responsible of. Women are known to always thinking about the future and thinking less of their financial need (Evans, 2019). As seen here, Maria is focused on making sure that the life of her kids when she gets some is more comfortable that the life she lived as a kid. With Jefferson’s foreseen promotion, saving will increase and this will increase their financial stability over the years making their goals easily achievable.
Weaknesses
In a month, Jefferson and Maria may find that their expenditure in a month is more that the income (Klahoma Central, 2021) they get and this will hinder their achievement of their goals towards saving more. Jefferson and Maria have no emergency fund so in case of an emergency that is not under insurance they will have to dig into their pockets for funding thus disrupting their money flow which they aim at saving more that spending. Rent may become a problem in this economy where it keeps rising every other day. If rent happens to increase, it means that there will be more cash outflow that inflow meaning that savings too will decrease their success rate of getting that family home they were planning on having in the coming five years of their financial plan.
Opportunities
Jefferson’s foreseen promotion is a good opportunity to get more money to their savings account. Maria’s side job which is baking, is also a good opportunity to get more money if her orders increase. This will mean more inflow of cash meaning more money in the savings account which in turn will help them reach th