This assignment will assess your ability to:

$$ Document an individual$$s financial planning related goals.

$$ Construct a net worth and cash flow statement.

$$ Explain the importance of net worth and cash flow in the financial planning process.

$$ Identify foundational financial management actions that can improve an individual$$s current and future situation.

Instructions:

The case study presented below contains the information that you collected from your new clients, Sara and Sam, during your introductory meeting with them.

Prepare a financial management report for the couple that includes the following information:

$1.$ A title page with the clients$$ names, your name, and the date. $(2$ marks$)$

$2.$ A summary of the clients$$ goals. $(3$ marks$)$

$3.$ A short$-$written introduction to the clients$$ net worth statement that explains what net worth is and the importance of why their net worth is being presented. $(2\mathrm{.}5$ marks$)$

$4.$ A net worth statements for the clients. $(15$ marks$)$

$5.$ A short introduction to the clients$$ cash flow statement that explains what free cash flow is and the importance of why their cash flow is being presented. $(2\mathrm{.}5$ marks$)$

$6.$ A cash flow statement for the couple. $(15$ marks$)$

$7.$ Two recommendations that will help improve the clients$$ current or future situation, including how implementing the action will improve the clients$$ situation identified in goals. $(10$ marks$)$

$$

Save the file with the naming convention,

FirstName.LastName.Assignment$1($e$.$g$.$ lee.Fitzsimmons.Assignment$1)$

It is recommended to upload your file in Excel format.

This assignment is worth $15\%$ of your final grade in this course and will be assessed based on the rubric above.

Sara and Sam McQueen Case

Sara $($age $38)$ and Sam $($age $40)$ Smith have been married for nine years. They have a six$-$year$-$old son named Tino and a three$-$year old daughter named Sophie. The family has lived in a house at $6$ Love Avenue, Makham, Ontario for $4$ years.

Sara and Sam have two goals. First, they would like to retire when Sam turns $60$ years old with an annual after$-$tax income of $$65,000($in today$$s dollars$).$ Second, they would like to fully fund four$-$years of post$-$secondary education for both of their children, starting when each child is $18$ years old.

Sara earns a gross annual salary of $$110,000$ as a speech pathologist. Sam is an actuary for an insurance company and earns $$100,000$ gross per year. In addition to the government source deductions they pay, Sara$$s employer deducts $$210$ per month from her pay cheque to cover her health and insurance benefits. Sam$$s employer does the same at a cost of $$150$ per month.

The couple have $$20,000$ in their chequing account. They also have $$50,000$ in a high$-$interest savings account for emergency purposes that earns interest of $4\%.$ The couple have two cars, one fully paid for and one that has a loan outstanding. Sara$$s five$-$year$-$old vehicle is worth $$6,000$ and Sam$$s brand$-$ new car is worth $$50,000,$ with a loan of $$25,000$ with a payment of

$$500$ per month. Sara has an RRSP with $$45,000$ invested in it$.$ Sam has an RRSP with $$100,000$ in it$.$ Also earmarked for the couple$$s retirement is the money they have invested in their respective TFSAs. Sara has $$15,000$ invested and Sam has $$10,000$ invested. Sara and Sam also own a RESP jointly where they save money for their child$$s education. The plan has $$40,000$ invested in it$.$

The couple own their own home jointly worth $$800,000.$ Their mortgage has an outstanding balance of $$400,000$ owing on it$.$ Their monthly mortgage payment is $$2100.$ They also pay property taxes on their home of $$7500$ per year. Additionally, they pay the following monthly costs related to their home: $$200$ for home insurance, $$150$ for heat, $$90$ for hydro, and $$100$for water. They pay $$2500$ for food and supplies to clean run their household.

Sara and Sam also pay $$90$ each per month for their respective cell phone plans, $$150$ per month for high$-$speed internet access and internet access, and $$100$ for cable television. Their monthly expenses related to their vehicles include $$120$ for insurance, $$120$ for maintenance, and $$250$ for gas. They also pay $$1,000$ per month in childcare expenses.

Sam has a student loan of $$20000$ with a payment of $$265$ per month. The couple have a joint unsecured line of credit with a $$40,000$ credit limit and $$15,000$ owing on$.$ The line of credit charges interest of $8\%$ and has a minimum payment of $$600.$ Additionally, Sara and Sam have a credit card with a credit limit of $$20,000.$

Sara and Sam generally take their family on one big trip per year, costing approximately $$8,000.$ Additionally, they spend about $$600$ per month on social activities for them and their kids.

Considering CPP and EI and income tax for $2023,$ Prepare net worth and monthly cash flow statement.

Required sources:

CPP:

CPP contribution rates, maximums and exemptions $$ Calculate payroll deductions and contributions $-$ Canada.ca

EI:

EI premium rates and maximums $$ Calculate p