It might seem easy to find money later in life, your kids are out of diapers and you’ve got some seniority in your paycheque. But what about when you are a young couple with young kids? Can a Cash Flow Plan work for you?
James is an architect and Anna is a teacher. They have two young children with a third on the way.
A few years ago they lucked out and bought a fixer-upper at a fraction of the price that most homes in the area go for. This couple only had two debts when they moved into their home. But two maternity leaves, several unplanned expenses, over-budget renovations to their fixer-upper, plus two car loans they were “approved” for, and their debt has grown by bounds.
They are feeling strapped every single month and feel like they really need to do something before they get in over their heads.
Wondering how two people with a combined gross income of $200,000 per year feel so strapped and are $654,500 in debt? Plenty of people are in this situation, aren’t they? After they had their mortgage in place they borrowed on credit cards, which they always meant to pay off, and purchased two cars they were convinced they could afford. As you can see, it’s a lot more than they can really handle. When they decided to get a Cash Flow Plan, over $2,980/month of their income was going toward debt repayment.
When it came down to it, even though the clients got an amazing deal on their fixerupper, they were still in a home that they couldn’t really afford. So here’s what we did:
“UNIFY THEIR DEBT! UNIFICATION IS KEY.”
The results of these changes also saved the client over $150,000 in interest and have them on track to be debt free in 15 years rather than a cycle of permanent indebtedness. Over the course of this plan, they’ll put away over $152,000 and have $500 a month to cover their insurance needs.
Meaning, a Cash Flow Plan found $3,700 a month to help these clients fund their plan, but the total found money would be closer to $650,000.
Due to our commitment to client confidentiality, we couldn’t provide a real-life example. Each client is unique. This illustrative case study is based on typical financial situations we manage. Contact us to learn more about what your financial recommendations might be, or to hear what real DLD clients have to say, read our testimonials.