Meet Stephanie
Pharmacy graduate
- 28 years old
- High income and high student debt
- Single, no kids
Goals
- Develop a Budget
- Debt Management
- 401k and Employee Benefits
- Buy a House in 5 Years
Situation
Stephanie recently started her first job after pharmacy school making a $125,000 annual salary with a student loan balance of $175,000. As a new graduate, she would like to buy a home right away but doesn’t know if it’s a feasible plan.
Challenges
Stephanie is most concerned with balancing the need to pay down high student loan balances and credit card debt while still enjoying life today. As a busy young professional, she doesn’t have the time or expertise to manage her own finances. After meeting with larger firms, she was turned away because she didn’t have a minimum of $300,000 to invest.
How we helped
- Developed budget and balance sheet and eliminated unused monthly subscription services
- Developed a savings plan to establish an emergency fund equivalent to 6 months’ worth of monthly expenses
- Refinanced student loan to lower monthly payment and increased monthly cash flow
- Referred her to a loan officer to evaluate first time home buyer programs and determine necessary down payment needed to purchase her first condo
- Recommended basic estate planning documents and introduced her to an estate attorney
- Signed Stephanie up for ongoing financial planning for a $650 initial fee and $375 ongoing monthly subscription
Summary
We helped her save $500 per month by refinancing her student loans and eliminating various monthly subscription expenses she was no longer using. We introduced her to a Loan Officer to see if buying a home was a feasible plan. After meeting with the Loan Officer, we discussed the factors that could keep her credit score in good standing. Due to a lack of an emergency fund or sufficient savings for a down payment we suggested delaying the purchase of a condo for a few years.
We also helped her evaluate all the options in her employee benefits package, including long and short-term disability, health, and life insurance. We also helped her analyze and select the best investment options in her 401k plan.
After she received our recommended action plan, we set a quarterly check-in schedule. Stephanie now has a trusted advisor to monitor her progress and hold her accountable on a regular basis.
Disclaimer: Case studies are hypothetical client scenarios. Planning recommendations may differ from your situation. Please consult with your own advisor before making any changes to your Financial Plan, Investments, or Insurance coverage.