Financial Counseling & Consumer Credit Case Study: Part 2 Section I (Unit 3 Application): Client Counseling & Motivation From the previous client session, you were able to pick up on some unique counseling principles and techniques. You look back at your notes and notice the following:

John Jane Comment: As long as we keep making the minimum credit card payment, we will be able to reach the goal of purchasing a new home. Comment: The neighbor next door was able to get a great deal on their home loan, we should do what they are doing. Client Session Notes: - Felt hostility in the room between the couple. - John took offenses when I spoke with Jane first about her perspective of the current financial situation. - Established the client relationship. - Still unclear on how to establish an action plan for the clients to complete their goals. - Jane did not take feedback so well and needs more clarification. - John brought up several examples of his past on how his family managed their finances. - Couple asked me to create a sample budget for them, and they will just fill in the blanks. - They asked me to sign off on their referral form from their Advisor. In addition, they told me they would be fine and are ready to go back their Financial Advisor. For this section; your Managing Financial Counselor has asked you to write a minimum one page summary on how you are going to use the above information to get ready for the next client meeting.

This summary will include: What decision making and problem solving strategies will you use with BOTH clients? Do you see any need for the clients to seek an external referral? If so, what would you recommend? If not, why? What financial counseling stage are you at with the Smiths? What needs to happen next? What type of intervention strategies would you use with your clients based on the information provided? How are you going to respond to your clients about signing off on their referral form? What is your ethical responsibility?

How will you improve your communication skills to provide better client feedback?

Section II (Unit 4 Application): Evaluate Your Clients Financial Health In preparation of your next meeting with the them, you now need to review the financial information. You are responsible for creating a report based off of this information. Analyze the Smiths self-reported budget, as well as their assets & liabilities, to evaluate their financial health and provide cash management counseling. In the Case Study: Resources folder, please review the Smiths Financial Data to create (show your work) the following items IN EXCEL with the information given by the Smiths: Cash Flow Statement Balance Sheet Financial Ratios (5 ratios; review Unit 4) After completing the financial statements and ratios (IN EXCEL), write a one page summary to your clients explaining the outcome of their Cash Flow Statement and Balance Sheet and how their ratio results compare to the benchmarks.

Section III: Client Recommendations In the last section of the client report, prepare recommendations for the Smiths to start working on after the next meeting. Please answer the following statements: Explain one method that you will you use to help the Smiths identify what areas they may need to cut back on their spending without you telling them what exactly they need to cut back on.

Client Data:

Client Data Joint Money

Market Account $ 5,500

Jane's Gross - Part Time Wages $ 15,000

Boat $ 25,000

Gifts to Family $ 2,500

Credit Card B (For Clothes) $ 4,000

Homeowners insurance $ 1,250

Mortgage Balance $ 80,000

Auto insurance/registration $ 1,100

Cash on hand $ 1,500

Income Taxes $ 25,000

House $ 120,000

John's Gross Salary $ 100,000

Personal Property $ 15,000

Food (For Groceries/Resturants) $ 10,000

Credit Card D (For Misc. Items) $ 4,500

Utilities $ 5,700

Jane's - Car Loan Balance $ 10,000

Maintenance (auto and home) $ 3,500

Joint Savings Account $ 400

Charitable Contributions $ 10,000

Jane's Car $ 22,000

Mortgage (including taxes) $ 17,000

Credit Card A (For Groceries/Resturants) $ 3,000 Combined Auto Loan Payment $ 12,000

Joint Checking Account $ 1,000

Boat Loan $ 5,000

John's - Truck Loan Balance $ 28,000

Phone $ 1,550

John's Truck $ 40,000

Gas/Plane Tickets for Transportation $ 4,200 Jane's 403(b) $ 20,000

Medical Expenses $ 8,500

John's 403(b) $ 70,000

Medical Bill Payments $ 4,000

Medical Bills $ 8,000

Clothing $ 5,500

Credit Card C (For Travel) $ 12,000 Miscellaneous $ 8,500

Smith's Boat Loan Balance $ 5,000

Internet $ 650

Medical Insurance Premiums $ 6,200

Life Insurance premium $ 1,600

Credit Cards (sum of ALL credit card payments) $ 3,500

Jane's 403(b) - Contributions $ 4,000

John's 403(b) - Contributions $ 4,000