1. Evaluate the following using the S.M.A.R.T. planning model and information in this section using the information below:

a. pay off student loan

b. buy a house and save for children's education

c. accumulate assets

d. retire

e. travel around the world in a sailboat.

Alice's assets may be a car worth about $5,000 and a savings account with a balance of $250. Debts include a student loan with a balance of $53,000 and a car loan with a balance of $2,700; these are shown below:

Alice's Financial Situation

ASSETS Car $5,000 Savings $250 Total $5,250

DEBTS Car Loan 2,700 Student Loan 53,000 Total 55,700

Her annual disposable income (after-tax income or take-home pay) may be $35,720, and annual expenses are expected to be $10,800 for rent and $14,400 for living expensesfood, gas, entertainment, clothing, and so on.

annual loan payments are $2,400 for the car loan and $7,720 for the student loan.

This is shown below:

Alice's Income and Expenses After tax income $35,720 Rent $10,800 Living expenses $14,400 Remaining for debt reduction and savings $10,520 students loan payments $7,720 car loan payments $2,400 remaining for savings $400