Creating a financial structure can improve your capacity to organise your finances (Australian Securities and Investments Commission [ASIC], 2009). The structure will necessarily include the different elements of your whole financial profile such as income sources; ongoing expenditures such as mortgage, credit card payments and living expenses; savings objectives; and fun money such as for holidays or special occasions (ASIC, 2009). This paper will identify the nature of the financial problems being experienced by Wendy and Keith. It will then discuss how creating a budgetary plan and establishing a balance between short-, medium- and long-term goals that are realistic and potentially achievable is required. The discussion will also include the priority action required to address high interest debt sources which currently place great pressure on their monthly expenditures, as well as how to improve their income revenue streams. The recommendations being made throughout this paper are designed to underpin the efforts of the couple to improve their immediate financial situation while also working towards achieving longer term financial goals. The problem
A broad overview shows the couple have a combined income of approximately $200, 000 (at around $16,500 per month). They currently have monthly expenses of approximately $20,000 per month which include school fees, health fund payments, mortgage repayments, care loan repayments, general living expenses, etc. Other sources of drain on the couples’ combined income include added contributions to superannuation funds, private family debt, miscellaneous costs associated with their three children (e.g. sports fees), increasingly living expenses, and a safety net account for Keith’s business. On the positive side, the couple has access to addition income by way of a share portfolio, listed debentures, a joint bank account for emergencies, and the possibility that Wendy will receive a substantial...
References: Australian Securities and Investments Commission (2007). Dealing with debt: Your rights and responsibilities. ASIC.
Australian Securities and Investments Commission (2011a). Investing between the flags: A practical guide to investing. ASIC.
Australian Securities and Investments Commission (2011b). Super decisions. ASIC.
Australian Securities and Investments Commission (2009). Your money. ASIC.
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