Case Studies

Client: Married couple in their late twenties with two children, ages 4 and 2

Challenge:

• Their residence (a single-family home) was being sold by their landlord.
• They did not want to move their young family back to an apartment, but couldn’t get approved for a mortgage.

• • • Reasons they couldn’t get approved were lack of emergency savings, Wife was a stay at home mom not earning employment income.  Husband had been steadily employed, but only with his current employer for less than two years. Husband also had a poor credit score due to late student loan payments.

   

Strategy:

• • Examine bank statements to understand cash flow
  • Clean up credit report
  • Create a payment schedule to pay down debt
  • Refinance student loans

Implementation:

• After looking closely at cash flow, it was identified that these clients were paying more than their fair share of household utilities.  We spoke with the landlord and renegotiated the arrangement for utilities, saving this family hundreds of dollars per month.
• Created a schedule of payments so that the clients new exactly how much they could afford to spend each month paying down the credit card debt.
• Negotiated an affordable payment plan for the student loans.
• Implemented automatic savings to build up a cash reserve.

Results:

• In less than one year this family qualified for a mortgage.  They found a wonderful home in Warwick to call their own.
• Credit scores increased to an acceptable number.
• Cash flow after purchasing the home has remained stable.
• Saving has become more difficult, but ongoing financial planning has helped them keep a routine of saving a little bit each pay period.

Client: Married couple in their late fifties, one child living in their home with her husband (age 35)

Challenge:

• • Interest income from savings was creating a tax liability.
  • Adult children were living at home creating a strain on cash flow
  • Life insurance policy was in danger of lapsing.

Strategy:

• • Meet with client and their accountant to develop a strategy to lower taxes.
  • Prepare the client for a difficult conversation with children.
  • Contact the insurance company to see what changes could be made to policy riders.

Implementation:

• • Implemented a 3-Tier cash reserve system to address any emergencies that may arise.
  • Took excess savings and created a balanced investment portfolio in consideration of the client’s risk tolerance and timeframe for investing.
  • Held a joint meeting with the client’s children to address the sensitive topic of contributing financially to the household.
  • Adjusted insurance policy riders to maintain coverage.

Results:

• The client received a tax refund for the first time in years due to the more tax-efficient savings and investment strategy.
• The client’s children now have their own cell phone subscriptions and car insurance, and are paying a small amount of rent.
• We eliminated an unnecessary rider on the policy, which now has the policy projected to last beyond the client’s life expectancy.