EP 36 | Real Life Client Scenario

In today’s episode, I will share with you a real scenario of clients Kim & Kanye (not their real names) that I have been working with for the past 2 years) in my business More Time Financial. As a result of working together, we were able to increase their savings by $1,000 pm / $12,000 pa and we were able to go from being $20,000 in debt to having a house deposit of $50,000 and purchasing their first house in less than 18 months. 

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This episode is brought to you by More Time Financial. A financial planning, money management and financial education company that are on a mission to help young Australians make smarter decisions with their money.

Client Current position 

• Age: 35 & 35

• Children: Two kids 

• Employment status: Both Self-employed

• Combined Income (Couple) - $150,000 pa before tax 

• Combined estimated expenses - $9,000 pm / $108,000 pa 

• Savings  - $1,000 pm / $12,000 pa  

• House status - Renting 

• Total Assets - $80,000 (Savings $60,000, Combined Super $10,000 & Car $10,000)

• Total Debts - $20,000 (Car loan, Credit Card & ATO Debt)

• Net position / net worth - $60,000 (Assets less Debts)

Top goals 

• Buy a house 

• Get on top of our finances and have some structure 

• Look at investment vehicles to grow our money either through property or shares 

How we helped / What we did 

Clarified their goals 

Buy a house 

• Buy a 4 bedroom house worth valued between $550,000 - $600,000

• Save a house deposit of a minimum of $50,000 within the next 12 - 18 months 

Get on top of our finances and have some structure 

• Clearly be able to see what money is for Kim’s business, what is Kanye’s business and what money is ours to spend. Know much much money we need to be withholding for tax each month. 

Income & Debt Plan 

• Looked at ways to increase their income in their business, reviewed their expenses and were about to reduce these from $9,000 pm - $8,000 pm (savings increase of $12,000 pa total of $24,000 pa)

• Maintain cash savings for their business expenses and an emergency savings fund of approx $20,000 

• Use the remaining savings to pay off their debts owing 

• Use the remaining $20,000 to put towards their house deposit 

• Made a plan to use this extra money that they were previously using top to pay down debt as well as the additional savings that we had been able to make and allocate this towards their house deposit savings & then build up their ASAP. 

Insurance plan 

• Review any insurance they had in place and put in place a suitable life, disability and income protection insurance 

Super/investment plan 

• Reviewed their current super funds and made sure they were invested correctly as well as make a plan to start contributing to superannuation from the start of the next financial year to help put them on track to achieve their longer-term goal of building additional investment vehicles to build their wealth. 

Estate plan 

• Agreed to put in place a Will and Estate plan including nominating a guardian to look after their children if the worst did happen. 

Results 

• As a result of working together, we were about to increase their savings by $1,000 pm / $12,000 pa 

• We were able to go from being $20,000 in debt to having a house deposit of $50,000 and purchasing their first house in less than 18 months.

Disclaimer

In preparing this podcast episode, the contributors have not taken into account any particular person's objectives, financial situation or needs. Before acting on this information, you should consider its relevance to your personal circumstances.