Question

goals Her credit card balance is now paid in full monthly. She is continuing to save more than well organized and she feels comfortable about the progress she is making with her financial Viki Rococo (age 26) has been living in her apartment for three years. Her savings system is Vikki is engaged to Tim Treble (age 28), and they are planning to be married in nine months. 106 of her gross salary in her 401(k) plan and she stays within budget. After dating for two years, Because they want to buy a house within the next 2 or 3 years, Vikki and Tim decide to meet with a mortgage lender to determine how large a mortgage they will be able to afford and what they need to save. The mortgage lender asks them both questions about their finances that they hadn't yet considered. Although Vikki feels comfortable with the ques- tions, Tim is nervous when he is forced to take a closer look at his finances. He discovers that he has much more debt than he realized. Vikki and Tim's financial statistics are shown below: a Asses: $4.000 (Tim) Checking account,* $10,500 (Vikki); 5. What warning signs of debt problems do they have, if any? Monthly Expenses: Rent, $750 (Vikki); $450 (Tim) Food, $250 (Vikki); $350 (Tim) including their emergency fund Student loan, $250 Car, $2,500 (Vikki); $15,000 (Tim) Credit card payments, $300 (Tim) 401(k) balance, $25,000 (Vikki); $8,000 (Tim) Entertainment, $300 Wedding expenses, $500 Gas/repairs, $350 (combined) Student loan, $9,000 Credit card balance, $10,000 (Tim) Retirement Savings: 401(k), $500 per month, plus 50% employer Income: match on first 7% of pay (Vikki); $400 per Gross annual salary, $50,000 (Vikki); month, plus 50% match on first 8% of pay $48,000 (Tim) (Tim) After-tax monthly salary, $2,917 (Vikki); $2,800 (Tim) Questions 1. Classify Vikki and Tim's credit as open-end or closed-end. 2. Analyze the debt payments-to-income ratios for Vikki and for Tim. 3. Analyze the 5Cs of credit for Vikki and Tim. What is the best way for Vikki and Tim to obtain their credit report? Liabilities: 6. How can they use Your Personal Financial Plan sheets 15-17?