Final Assignment Part B

As a financial planner, you have been asked by the bishop to help a family in the ward. You have met with Brother and Siste
to gather all of their financial information and present it to you. During the last meeting they expressed dispair concerning th
with the following information. They have expressed a sincere desire to put their financial life in order, no matter what sacrifi

You have suggested a family council, and they have explained to their 3 children that everyone will be involved in learning co
During your previous visit you helped them cut up all of their credit cards. They have made a commitment to "pay as you go
You have been asked to prepare a comprehensive financial plan that will help them now, as well as prepare them for retirem
Brother and Sister Hopeful are both 35 years old.

Brother Hopeful has a good job and brings home $4,800 / month in net take home pay. He does have a profit sharing progr
in the amount of $150 / month. Sister Hopeful does a small part time job out of their home while the children are at school a

They currently have 2 cars. The older car is paid off, but they still have a payment of $200 / month on the new car for 28 mo
but they have a first mortgage payment of $1,149.00 / month on the loan at 6% APR, and $582.82 / month payment on the 2
When they purchased their home 8 years ago they made a substantial downpayment, and their home is currently worth $17

The average monthly expenses that they have provided show the following: $450 / food, $155 / several lessons for each ch
$70 / life insurance, $200 / medical insurance, $120 / car insurance for both cars, $25 / internet, $95 / cable TV, $275 / all ut
$85 / cell phone program for both, $170 / gas for both cars, $85 / bowling league, $35 / newspaper, $30 / misc.
They pay $615 in tithing and offerings and $35 to other charities.

They have given you the following information concerning their debt. Because they cannot make all of their payments, they
and in some cases, they have missed payments. They are always receiving debt collection phone calls and there is significa
Sister Hopeful's mother has made some of the payments for them, but her family is not very well off and can't help much lon

Amount
$6,000.00
$1,000.00
$12,619.08
$19,225.00
$5,200.00
$1,969.78
$1,876.97
$49,612.40
$119,412.57
$216,915.80

APR %
12.0%
15.0%
11.0%
6.0%
7.0%
12.0%
15.0%
9.5%
6.0%

Current Payments
Payment Remaining Description
$158.00
48
Credit Card #1
$34.67
36
Credit Card #2
$274.37
60
Credit Card #3
$280.85
84
Credit Union Loan
$200.00
28
Car Loan
$92.72
24
Gas Credit Card
$65.07
36
Medical Bill
$582.82
142
2nd Mortgage
$1,149.00
147
1st Mortgage
$2,837.50

Total debt

After reading your written report, the bishop has asked you to serve on a ward council welfare committee to help this faithful
As a minimum, the committee has been asked to prepare a monthly budget of their current situation, a proposed budget to h
eliminate all of their debt and prepare them for retirement.

You will receive up to 5 points for the budget of their current situation, up to 10 points for a proposed budget along with sugg
and you will receive up to 10 points for a detailed plan to eliminate their debt and establish a retirement plan (5 + 10 + 10 = 2
Submit all of your completed spreadsheet for grading.

313957060.xlsx, 04/14/2016

e ward. You have met with Brother and Sister Hopeful and have asked them
meeting they expressed dispair concerning their situation and presented you
eir financial life in order, no matter what sacrifices they have to make.

n that everyone will be involved in learning correct principles for everyone's long term benefit.
have made a commitment to "pay as you go", but need help to know where to begin.
hem now, as well as prepare them for retirement.

me pay. He does have a profit sharing program where the company contributes to his 401k
their home while the children are at school and brings home a net take home paycheck of $350 per month.

ent of $200 / month on the new car for 28 more months at 7% APR. They own their home
APR, and $582.82 / month payment on the 2nd mortgage at 9.5% APR.
yment, and their home is currently worth $175,000.

50 / food, $155 / several lessons for each child, $30 / laundry, $20 / dry cleaning, $15 / gifts
rs, $25 / internet, $95 / cable TV, $275 / all utilities, $75 home phone service,
e, $35 / newspaper, $30 / misc.

they cannot make all of their payments, they have been making minimum payments,
ebt collection phone calls and there is significant stress in their home.
ily is not very well off and can't help much longer.

4800
350

5150
2837.5
0.5509709

1675
4512.5
540
$5,052.50
61800
1030
4120

388
400
10864
0.0864
0.0432

council welfare committee to help this faithful family.

their current situation, a proposed budget to help them progress forward, and a detailed plan to

points for a proposed budget along with suggested changes to meet your plans,
nd establish a retirement plan (5 + 10 + 10 = 25 points total).

313957060.xlsx, 04/14/2016

Final Assignment Part A

As a financial planner, you have been asked by the bishop to help a family in the ward. You have met with Brother and Sister H
to gather all of their financial information and present it to you. During the last meeting they expressed dispair concerning their
with the following information. They have expressed a sincere desire to put their financial life in order, no matter what sacrifices

You have suggested a family council, and they have explained to their 3 children that everyone will be involved in learning corre
During your previous visit you helped them cut up all of their credit cards. They have made a commitment to "pay as you go", b
You have been asked to prepare a comprehensive financial plan that will help them now, as well as prepare them for retirement
Brother and Sister Hopeful are both 35 years old.
Brother Hopeful has a good job and brings home $4,800 / month in net take home pay. He does have a profit sharing program
in the amount of $150 / month. Sister Hopeful does a small part time job out of their home while the children are at school and

They currently have 2 cars. The older car is paid off, but they still have a payment of $200 / month on the new car for 28 more
but they have a first mortgage payment of $1,149.00 / month on the loan at 6% APR, and $582.82 / month payment on the 2nd
When they purchased their home 8 years ago they made a substantial downpayment, and their home is currently worth $175,0

The average monthly expenses that they have provided show the following: $450 / food, $155 / several lessons for each child,
$70 / life insurance, $200 / medical insurance, $120 / car insurance for both cars, $25 / internet, $95 / cable TV, $275 / all utilitie
$85 / cell phone program for both, $170 / gas for both cars, $85 / bowling league, $35 / newspaper, $30 / misc.
They pay $615 in tithing and offerings and $35 to other charities.

They have given you the following information concerning their debt. Because they cannot make all of their payments, they hav
and in some cases, they have missed payments. They are always receiving debt collection phone calls and there is significant
Sister Hopeful's mother has made some of the payments for them, but her family is not very well off and can't help much longer

Amount
$6,000.00
$1,000.00
$12,619.08
$19,225.00
$5,200.00
$1,969.78
$1,876.97
$49,612.40
$119,412.57
$216,915.80

APR %
12.0%
15.0%
11.0%
6.0%
7.0%
12.0%
15.0%
9.5%
6.0%

Current Payments
Payment Remaining Description
$158.00
48
Credit Card #1
$34.67
36
Credit Card #2
$274.37
60
Credit Card #3
$280.85
84
Credit Union Loan
$200.00
28
Car Loan
$92.72
24
Gas Credit Card
$65.07
36
Medical Bill
$582.82
142
2nd Mortgage
$1,149.00
147
1st Mortgage
$2,837.50

Total debt

You have been asked to identify 3 principles you have learned from each of the Chapters 1, 2, 3/9, 5, 6, 7, 8, 10 that you would
Give examples of how it would help them and why you would teach these specific principles.
You are to identify principles from these chapters and not just do the math. Math isn't involved when you are discussing princip

Submit your written report as if you were addressing the bishop and explain to him how you can help this family.
You should have a minimum of a lengthy paragraph for each principle. Use the format provided in BrainHoney for your templat

24 points possible = 8 chapters x 3 points

6 additional points are available based on the depth of thought and the appearance of the paper.
You MUST write on your paper that you did this work absolutely by yourself with no outside help and sign it

to attest to this fact.

30 points total for Part A

met with Brother and Sister Hopeful and have asked them
essed dispair concerning their situation and presented you
rder, no matter what sacrifices they have to make.

ll be involved in learning correct principles for everyone's long term benefit.

mmitment to "pay as you go", but need help to know where to begin.
as prepare them for retirement.

have a profit sharing program where the company contributes to his 401k
the children are at school and brings home a net take home paycheck of $350 per month.
$9,634.67

h on the new car for 28 more months at 9% APR. They own their home
2 / month payment on the 2nd mortgage at 9.5% APR.
ome is currently worth $175,000.

several lessons for each child, $30 / laundry, $20 / dry cleaning, $15 / gifts
$95 / cable TV, $275 / all utilities, $75 home phone service,
er, $30 / misc.

all of their payments, they have been making minimum payments,

e calls and there is significant stress in their home.
Taxable income
off and can't help much longer.
Donations

$2,969.78
$530.22

9, 5, 6, 7, 8, 10 that you would teach this family.

hen you are discussing principles.

help this family.

n BrainHoney for your template.

Food
Lessons
laundry
Dry cleaning
gifts
life insurance
nedical insurance
Car insurance
Internet
Cable
Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Misc.
Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card

5150
615

540

450
155
30
20
15
70
200
120
25
95
275
75
85
170
85
35
30
2550

350
155
30

$158.00
$34.67
$274.37
$280.85
$200.00
$92.72

70
200
120

275
85
85

1910
158
274
280.85
200

Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Sell second car

$65.07
65.07
$582.82
582.82
$1,149.00
1149
$2,837.50 $2,709.74
$5,387.50 $4,619.74
3500

$530.26
816.49

$28.30

Current Budget
Total Net Income

5,150.00

*Note: All budget assumptions

are made on the following
conditions
1) Inflation is a non-factor
2) Average expenses remain consistent
3) none of their children are over the age of 10
4) Annual net income is unchanging
5) Interest rates are fixed
6) They own a washing machine and dryer

Amount Owed
$6,000.00
$1,000.00
$12,619.08
$19,225.00
$5,200.00
$1,969.78
$1,876.97
$49,612.40
$119,412.57

APR %
12.0%
15.0%
11.0%
6.0%
7.0%
12.0%
15.0%
9.5%
6.0%

$216,915.80

Numbers in this row indicate

dollar amounts paid in debt per
period

Payments
Remaining
48
36
60
84
28
24
36
142
147

Donations (Paid on Gross)

Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable

615.00

$
$
$
$
$
$
$
$
$
$

450.00
155.00
30.00
20.00
15.00
70.00
200.00
120.00
25.00
95.00

Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.

$
$
$
$
$
$

275.00
75.00
85.00
170.00
85.00
35.00

$
$

30.00
2,550.00

$
$
$
$
$
$
$
$
$
$
$

158.00
34.67
274.37
280.85
200.00
92.72
65.07
582.82
1,149.00
2,837.50
5,387.50

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations

Payoff strategy- Allocate surplus budget at 15%- savings, 85% to next low
savings reach 15% of net income- at that point, full additional surplus devote

Sell second car (3500 dollars), eliminate Gas Credit card and credit card #2,
annual Public transit pass ($450)- allocate remaining resale cash, as well
Begin saving for next year's Transit pass
Surplus cash is equal to:
530.22
After transit pass, 80.22

New budget (starting)

Budget at 5 months (after Medical bill payoff)
$
$
$
$
$

615.00
67.91
350.00
155.00
10.00

$
$
$
$

15.00
70.00
200.00
60.00

275.00

$
$

85.00
85.00

$
$
$

37.50
30.00
2,055.41

$
$
$
$
$
$
$
$
$
$
$
$

158.00
274.00
280.85
200.00
65.07 Payoff time
582.82 Amount Paid
1,149.00 On Medical Bill
2,709.74
4,765.15
384.85

Note- Credit card balances

determined using Nper and
given variables, savings is
calculated as having no
interest accrual

4.12
449.92

Amount Owed
$5,499.98
$0.00
$11,810.95
$18,292.13
$4,335.14
$0.00
$0.00
$48,626.38
$116,620.11

us budget at 15%- savings, 85% to next lowest balance until

e- at that point, full additional surplus devoted to other creditors $ 13,223.35 $

iminate Gas Credit card and credit card #2, use remaining funds to purchase
50)- allocate remaining resale cash, as well as new surplus, to Medical bill.
Begin saving for next year's Transit pass

APR %
12.0%
0.0%
11.0%
6.0%
7.0%
0.0%
0.0%
9.5%
6.0%

Payments
Remaining
43
0
55
79
23
0
0
137
142

1,854.64

Surplus after monthly payo

Budget at 12 months (after Car Loan payoff)

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable

$
$
$
$
$
$
$
$
$
$
$
$

Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.

$ 275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,065.12

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Surplus

615.00
77.62 Balance:
350.00
155.00
10.00
15.00
70.00
200.00
60.00
-

$ 158.00
$
$ 274.37
$ 280.85
$ 200.00 Payoff time
$
- Amount Paid
$
- on car loan
$ 582.82
$ 1,149.00
$ 2,645.04
$ 4,710.16
$ 439.84

$ 17,115.28
Surplus after monthly payoff allocated to savings

735.50

6.93
639.84

$ 4,436.02

Amount Owed
APR %
$4,756.99 12.0%
$0.00 0.0%
$10,615.77 11.0%
$16,946.35 6.0%
$0.00 0.0%
$0.00 0.0%
$0.00 0.0%
$47,208.02 9.5%
$112,598.90 6.0%

(after Car Loan payoff)

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
give bacck! Internet
Cable
Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.
Payments
Remaining
36
0
48
72
0
0
0
130
135

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Surplus

$
$
$
$
$
$
$
$
$
$
$
$

615.00
103.87 Balance:
350.00
155.00
10.00
15.00
70.00
200.00
60.00
25.00
-

$ 1,309.62

$
275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,116.37

$
158.00 Payoff time
$
- Amount Paid
$
274.37 on CC #1
$
280.85
$
$
$
$
582.82
$ 1,149.00
$ 2,445.04
$ 4,561.41
$
588.59

$ 16,009.28

6.62
746.59

$ 4,939.83

Budget at 19 months (after Credit Card #1 payoff)

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable
Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.

Amount Owed
$0.00
$0.00
$9,341.74
$15,552.76
$0.00
$0.00
$0.00
$45,709.16
$108,434.82

APR %
12.0%
0.0%
11.0%
6.0%
0.0%
0.0%
0.0%
9.5%
6.0%

Payments
Remaining
0
0
41
65
0
0
0
123
128

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Surplus

$
$
$
$
$
$
$
$
$
$
$
$

615.00
127.57 Balance:
350.00
155.00
10.00
15.00
70.00
200.00
60.00
25.00
-

$
275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,140.07

$
$
$
274.37 Payoff time
$
280.85 Amount Paid
$
- on CC#3
$
$
$
582.82
$ 1,149.00
$ 2,287.04
$ 4,427.11
$
722.89

$ 20,126.70

Budget at 29 months (after Credit Card #3 payoff)

$ 2,320.41

Now saving 10% of surplus

#-0

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable
Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.

Amount Owed

9.84
997.26

$0.00
$0.00
$0.00
$13,475.59
$0.00
$0.00
$0.00
$43,419.21
$102,228.18

APR %
12.0%
0.0%
11.0%
6.0%
0.0%
0.0%
0.0%
9.5%
6.0%

Payments
Remaining
0
0
0
55
0
0
0
113
118

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Surplus

$ 9,812.07

Budget at 40 months (after Credit Union loan payoff)

$
$
$
$
$
$
$
$
$
$
$
$

615.00
112.48 Balance:
350.00
155.00
10.00
15.00
70.00
200.00
60.00
25.00
-

$ 3,755.66

$
275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,124.98

$
$
$
$
$
$
$
$
$
$
$
$

280.85 Payoff time

- Amount Paid
- On CU Loan
582.82
1,149.00
2,012.67
4,137.65
1,012.35

$ 19,050.02 $ 13,873.90

10.73
$ 1,293.20

Amount Owed
APR %
$0.00 12.0%
$0.00 0.0%
$0.00 11.0%
$0.00 6.0%
$0.00 0.0%
$0.00 0.0%
$0.00 0.0%
$40,682.66 9.5%
$95,033.67 6.0%

Payments
Remaining
0
0
0
0
0
0
0
102
107

edit Union loan payoff)

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable

Budget at 64 months (after Mortgage #2 payo

$
$
$
$
$
$
$
$
$
$
$
$

615.00
140.57 Balance:
350.00
155.00
10.00
15.00
70.00
200.00
60.00
25.00
-

$ 5,342.10

Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.

$ 275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,153.07

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage

Amount Owed
APR %
$
$0.00 12.0%
$
$0.00 0.0%
$
$0.00 11.0%
$
$0.00 6.0%
$
$0.00 0.0%
$
$0.00 0.0%
$
$0.00 0.0%
$ 582.82 Payoff time
24.29
$0.00 9.5%
$ 1,149.00 Amount Paid $ 1,847.93
$77,896.81 6.0%
$ 1,731.82 On 2nd Mortgage
$ 3,884.89
$526.18
$ 1,265.11
Dollar amout remaining after 24 months,
paid from savings

Total Monthly Obligations

Surplus

$ 45,499.32

nths (after Mortgage #2 payoff)

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable
Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.
Payments
Remaining
0
0
0
0
0
0
0
0
83

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Surplus

$
$
$
$
$
$
$
$
$
$
$
$

615.00
198.85 Balance:
350.00
155.00
10.00
15.00
70.00
200.00
60.00
25.00
-

$ 8,189.60

$ 275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,211.35

$
$
$
$
$
$
$
$
- Payoff time
$ 1,149.00 Amount Paid
$ 1,149.00 On 1st Mortgage
$ 3,360.35
$ 1,789.65

28.51
$ 2,938.65

$ 83,774.58

Budget at 93 months (after all debts are paid)

While putting 15% into savings, family has a
monthly $2320 surplus after 7 years and 9 months
of careful budgeting

It is also worth noting that on our previous draft, savings

were 25% of the budget. While this resulted in a final
savings balance near 33,000, the payoff time took an
extra year and resulted in a significant difference in cost
of credit. The annual surplus exceeds the above savings
balance, so this method actually gives them more money.

Assuming Bro. Hopeful has had this job since the

age of 25, this should be his 401K balance with 8%
APR: See FV function below
401k Balance:
$70,147.59
Savings Balance:
$ 15,396.19
Total debts owed (Period Start)
$ 216,915.80
Total Paid:
$ 250,241.17
Total Cost of Credit:
$ 33,325.37
Annual Surplus (Including Savings) $ 37,590.00
Amount Owed
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00

APR %
12.0%
0.0%
11.0%
6.0%
0.0%
0.0%
0.0%
9.5%
6.0%

Payments
Remaining
0
0
0
0
0
0
0
0
0

Donations
Savings
Food
Lessons
laundry
Dry cleaning
gifts
life insurance
Medical insurance
Car insurance
Internet
Cable

$
$
$
$
$
$
$
$
$
$
$
$

Utilities
Home Phone
Cell Phone
Gas
Bowling League
Newspaper
Public transit pass
Misc.

$ 275.00
$
$
85.00
$
85.00
$
$
$
37.50
$
30.00
$ 2,790.00

Debts
Credit Card #1
Credit Card #2
Credit Card #3
Credit Union Loan
Car Loan
Gas Credit Card
Medical Bill
2nd Mortgage
1st Mortgage
Total Monthly Obligations
Surplus

615.00
772.50
350.00
155.00
10.00
20.00
70.00
200.00
60.00
25.00
-

$
$
$
$
$
$
$
$
$
$
$ 2,790.00
$ 2,360.00

Balance:

$ 15,396.19