Name: Shaye Dumas

Period: 2A

FINANCIAL CASE STUDY: MARIA LOPEZ

Instructions: Read the case and fill in the blanks using local estimates for income
and expenses including food, clothing, housing, car, insurance, and other items.
Use this financial information as you prepare a financial plan for Maria, a single
young adult living away from home. The financial plan should enable Maria to live
within her income and save for future goals.

Net Worth Statement

Maria is 22 years old. She works as a Veterinarian
in Salt Lake City.
Marias Assets. Maria owns a used car valued at
$6,000. She has $200 cash in her apartment and
$900 in a bank checking account. She owns jewelry
valued at $400, a CD sound system valued at $300,
and a computer valued at $1,200.
Personal items such as clothes, books, luggage, a
bicycle, furniture, and dishes are valued at $1,100.
Maria did not purchase the optional term life
insurance policy available through her employer
because she has no dependents.

Car
Cash
Bank
Jewelry
CD System
Computer
Personal
Mutual Fund
Total Assets

$6,000.00
$200.00
$900.00
$400.00
$300.00
$1,200.00
$1,100.00
$1,500.00
$11,600.00

Car
Student Loan
Credit Card
Total Liabilities

$4,000.00
$6,000.00
$700.00
$10,700.00

Net Worth

$900.00

Maria owns a stock mutual fund with a current value

of $1,500.
Marias Liabilities. Maria owes $4,000 on her car
and $6,000 on a student loan. Her credit card
purchases were for furniture for the apartment and
clothes for work.

Income and Expense Statement

Marias Financial Goals. Maria would like to pay
off her student loan, reduce her credit card debt,
and increase her savings. She wants to buy a TV
set and continue to upgrade her wardrobe for work.
A summer trip with friends would also be nice.

INCOME
(Monthly)
Salary
Take-home pay
Gifts
Total Income

$7,770.84
$7,382.30
$1,000.00
$8,382.30

Maria wants to begin contributing to her employerbased retirement savings plan at work. It is called a
401(k) plan, and her employer matches her
contribution. This is a salary reduction plan, so

EXPENSES
Rent
Electrical
Telephone

$1,000.00
$50.00
$25.00

Maria would not pay income tax on the

contributions and earnings are tax-deferred.
Calculate Marias Net Worth: Total Assets-Total
Liabilities =

MARIAS INCOME
Marias annual salary is $93,250. After taxes, her
take-home pay is approximately $88,587.52, which
is automatically deposited into her bank checking
account. In addition, Maria receives an annual cash
gift of $1,000 from her grandparents. Maria
reinvests her earnings in her mutual fund account.
She expects no other income this year.
MARIAS EXPENSES
Housing. Maria pays monthly rent of $1,000.00
and her electrical bill is $50.00
. Monthly
telephone and Internet costs are $50.00 and the gas
bill is $30.00____.
Food and Clothing. Marias food at home
averages $100.00 per month. Her food away from
home averages $50.00
. She spends about
$50.00
a month on clothing and
$30.00
on laundry and cleaning.
Car. Maria is beginning to think that her car is an
expensive convenience because public
transportation is good and she lives near a shopping
center. Gasoline averages
$30.00
per
month. Maintenance costs average
$50.00
. Parking fees are $10.00
per month
and license costs are
$30.00
per year.
Loans. Marias monthly car payment is
$200.00
and her student loan payment
is
$150.00
. She pays $50 a month on her
credit card balance.
Insurance. Marias auto insurance costs
$500.00
per year. She does not own life
or renters insurance. Her medical, dental, and
disability insurance are paid by her employer.
Recreation. Maria spends

$100.00

on

Internet
Gas
Food Home
Food Away
Clothing
Laundry/Clean
Gasoline
Car Maintenance
Parking
License
Car Loan
Student Loan
Credit Balance
Auto Insurance
Health Club
Movies
Personal
Gifts
Savings
Emergency
Mutual Fund
401(k)

$25.00
$30.00
$100.00
$50.00
$50.00
$30.00
$30.00
$50.00
$10.00
$30.00
$200.00
$150.00
$50.00
$41.67
$100.00
$30.00
$20.00
$100.00
$0.00
$900.00
$50.00
$0.00

health club dues and

$30.00
on movies.
She enjoys reading, hiking, and swimming.
Other. Maria spends about
$20.00
a
month on haircuts and personal care. She
contributes $10.00
a month to a charitable
organization and spends about $100.00
a year
on gifts for family and friends.
Savings and Investments. Maria knows that
saving regularly is important so she sets saving as a
regular monthly expense.
Her emergency fund is the $900 in her checking
account. She would like to increase it to an amount
equal to three months living expenses. She
authorized the bank to automatically deposit $50
each month from her checking account into her
mutual fund account. She also plans to contribute to
the 401(k) plan at work.
Total Expenses $2,221.67
Cash Flow (Net Income)=Income-Expenses
Net Income $6,160.63
Maria would like to pay off her student loans, reduce her credit card debt, buy a TV
set, buy more clothes, go on a summer trip with her friends, contributing to her 401
K plan, and increase her emergency fund equal to three months rent.
The list of these goals in order from most important to least important is: Student
loans, credit card debt, she should probably also get rid of her car loan, increasing
her emergency fund, contributing to her 401 K plan, getting more clothes, getting a
TV, and going on a vacation.
Student Loans: $6,000
Credit Card Debt: $700
Car Loan: $4,000
Emergency fund: $2,100
401 K Plan: 2% of income= $147.65
Clothes: $100
TV: $200-300
Vacation: $500-2,000