Kelce $(28)$ and Taylor $(26)$ were married five years ago, only months after graduating from

university. Kelce recently received a joint degree in teaching degree and kinesiology. He is

employed with as a high school football coach earning $$76,600$ per year. Taylor has a doctorate

in veterinary medicine and works with cats earning $$84,600$ per year. They estimate their aftertax income to be about $$64,500$ and $$59,000$ respectively. Both feel that their job positions are

secure$.$

Kelce and Taylor$$s $1$st child Karma was born in February of last year. Taylor has just returned to

work after a year$$s maternity leave. They pay $$850$ per month in childcare costs. They would

like to have a second child $($they plan on naming him or her Kansas$)$ within the next $3$ years but

they want to be in their own home before the child is born.

They currently live in a $3-$bedroom townhouse in southwest Calgary that they rent for $$1,950$ per

month.

Taylor drives a ten$-$year$-$old Toyota Camry valued at $$5500$ and Kelce drives a three$-$year$-$old

Toyota Tacoma valued at perhaps $$21,000.$ Kelce purchased his Tacoma two years ago for

$$32,000.$ He financed the purchase with a five$-$year $$30,000$ car loan at $5\mathrm{.}9\%.$ His monthly

payment is $$496,$ and his current balance is approximately $$21,500.$

Kelce and Taylor have been saving $$500$ per month for the past four years for a down payment

on their $1$st home. They currently have about $$41,000$ in a joint savings account. They plan on

continuing to save $$500$ per month to increase the amount they put down on the home. They plan

on buying a $3-$bedroom home near the home they are currently renting. They expect to pay about

$$450,000.$ They want to buy the home within the next two years as they want another child and

would like to be in the home before the child is born.

Kelce and Taylor have student loan balances totaling $$8500.$ They pay $$118$ per month and the

interest rate is $6\mathrm{.}5\%.$ They also have a $$3,500$ balance on a joint credit card from last summer$$s

vacation. They are paying $$200$ per month and the interest rate is $19\mathrm{.}9\%.$

Kelce has been contributing $$300$ per month to a RRSP account and his current balance is about

$$16,000.$ Taylor works for the Alberta Government and is part of the LAPP Pension plan. She

contributes $9\%$ of her gross pay to her pension plan. She plans on retiring at age $60$ with a full

pension.

Their monthly expenses include utilities $$495,$ renter$$s insurance $$60,$ groceries and household

stuff $$900,$ clothes budget $$300,$ haircuts and personal care $$125,$ entertainment and eating out

$$575,$ health club membership and sports fees, $$225,$ gifts budget $$100,$ charity $$100,$ travel

budget $$350,$ auto insurance $$110,$ auto maintenance budget $$100,$ auto fuel and oil changes

$$600,$ misc. auto $$25.$

Taylor & Kelce have exciting plans for the future. They would like to purchase their $1$st home in

the next couple of years. They want to have a second child once they are in their home and

Taylor will want to take another year of maternity leave. They want to be in control of their

financial future therefore they would like to get out of debt as soon as possible so they only debt

they have going forward is their home. They want to be able to take family vacations without

putting the trip on their credit card and stressing about paying the balance off. They also want to

be able to save for their vehicles in the future, so they don$$t have to take on debt. In addition,

they know how valuable their university education is for themselves and they want to be in a

position to pay for their children$$s tuition and as much of the room and board they may need as

possible.

They feel good about how they have managed their money to date. However, they are not sure

what they should be doing to make sure they can achieve their goals and they don$$t really know

if what they have been doing is what they should be doing. They have come to you looking for

help in creating a financial plan.

what would be their Budget and Debt management?