lee_case_study-newlyweds.PDF
The Lee Case Study
Megan and Kevin Lee--The Newlyweds
Megan and Kevin were ma
ied just a few months ago, and they are happily adjusting to their
new lives together. Megan, who grew up in San Diego, and Kevin, who grew up in a small town
30 miles from Memphis, met at State University and dated for most of their college careers. Both
had enrolled in a large Physics course, and they happened to sit next to each other the first day
of class. By the end of the week, they each decided the only way to survive the class was to
organize a study group...and by the end of the semester they were “an item.” While neither of
them decided to become a physics major, Megan did receive her Bachelors degree in psychology
and started graduate school two years ago. Kevin received his Bachelors degree in Business
last summer and began his first job with a large consulting firm soon thereafter. He received a
$5,000 signing bonus that he used to open a money market mutual fund and to buy stock in
AT&T.
The first few months of ma
iage have been accompanied by many changes in both Megan and
Kevin’s lives. These include the normal challenges of merging two individual lives into one (e.g.,
selecting an apartment, taking a spouse’s needs and wants into account when deciding on
employment, etc.). But, as with many couples, financial management issues have been
particularly challenging. While dating they were each somewhat aware of the other’s spending
patterns and college funding, but financial practices were considered individual choices and not
eally discussed. Now as a ma
ied couple they want to merge their finances, so both past and
future financial management practices are topics of debate.
The good news is that Megan and Kevin communicate well with each other. They have always
een able to express their opinions, even conflicting opinions, without letting the conflicts
ecome personal in nature. In addition, a two-day financial planning seminar given by an
experienced Certified Financial Planner (CFP) practitioner was one of the perks offered by
Kevin’s employer for all new employees and their spouses. This combination of instruction and
personal communication skills has provided Megan and Kevin with the tools to start tackling their
financial planning issues.
The bad new is that there are some difficult issues to tackle. They have significant debt, some
education loans as well as credit card balances. While Kevin’s father supported him financially
for at least half of his college costs, Megan provided for most of her own college expenses. In
addition, after years of college Megan and Kevin are experiencing pent up demand--the urge to
uy new clothes, furniture, cars, etc.--now that Kevin finally has a real job with a good income.
Then there are decisions to make about employer benefit plans, insurance, savings, etc. And
finally, Kevin is concerned about his father’s (Lyle Lee’s) financial future. His mother died when
Kevin was in high school, and his father (now age 50) has worked hard to see that all three
children were able to finish college. However, Kevin is concerned that his father has not been
able to provide for his own retirement.
Motivated by the financial planning seminar they attended, Megan and Kevin have worked the
past couple months to gather as much financial information as they could. Since they had little
idea about how much they were spending on things like eating out, entertainment, etc., they have
een keeping track of all their expenditures for the last two months. They have now filled out the
following forms they received at the seminar as completely as possible. Read the information
Megan and Kevin have provided so that you can “get acquainted” with them. As you first read
the case, you probably will not understand all the vocabulary or why certain information is even
included. Feel free to read ahead in your text or ask about terms that are not clear to you. By
the time you reach the end of this course, Megan and Kevin, as well as their financial lives, will
e old friends, and you will feel very comfortable with what all of this means!
PERSONAL FINANCIAL INFORMATION
Client Information
Spouse Information
Name: Kevin Lyle Lee
Name: Megan Lynne Lee
Birth Date: October 7, 1978
Birth Date: XXXXXXXXXXJuly 28, 1976
Soc. Sec. No.: XXXXXXXXXX
Soc. Sec. No.: XXXXXXXXXX XXXXXXXXXX
Business Phone: 512/ XXXXXXXXXX
Business Phone: XXXXXXXXXX/ XXXXXXXXXX
Residence Address: 1626 Volunteer Dr. #425
Smithvale, USA 78131
Home Phone: 512/ XXXXXXXXXX
Wedding Date: XXXXXXXXXXJuly 18, 2001
CHILDREN
Name Birth Date Social Security Number Grade
None
EDUCATION School Degree Year Received
Kevin State University B.A. Business August, 2001
Megan State University B.A. Psychology May, 1999
State University Ph.D. Social Work May, 2004 (projected)
OCCUPATION Employer Position XXXXXXXXXXYears
From To
Kevin DeVitt Consulting Computer Information Specialist 2001-present
Megan State University Teaching/Research Assistant 1999-present
FINANCIAL PLANNING CONSULTANTS
Name
Address
Phone
Financial Planner
Eric Anderson, CFP
Anderson Financial Consultants
XXXXXXXXXX
Attorney
None
Securities Broker
None
Bank Officer
None
State University Credit Union
Smithvale, USA 60131
XXXXXXXXXX
Insurance Agent
Alice Rodriguez
The Axtell Agency
1563 Trail Brush
Smithvale, USA 60131
XXXXXXXXXX
FINANCIAL PLANNING DOCUMENTS
Location
Personal Property Inventory
None
Wills/Trusts:
None
Insurance:
Life
Group policy through DeVitt Consulting
Information booklet in desk drawer at home
Health
Group coverage through DeVitt Consulting
Information booklet in desk drawer at home
Dental
Group coverage through DeVitt Consulting
Information booklet in desk drawer at home
Disability
income
None
Auto
Policy in desk drawer at home
Homeowners/
Renters
None
Deeds:
Auto
In desk drawer at home
Birth/Ma
iage/Other
Certificates:
Birth
Ma
iage
Megan’s is in desk drawer, but cannot find Kevin’s
In desk drawer at home
ASSETS - January 1, 2002
LOCATION
BALANCE
RATE OF
INTEREST
MATURITY
CHECKING
State Univ. Credit Union1,2
State Univ. Credit Union1,3
(minimum balance acct.)
$ 4,809
$ 780
N/A
N/A
N/A
N/A
MONEY MARKET
ACCOUNTS/FUNDS
State Univ. Credit Union1,4
(opened 2001)
Fidelity Cash Reserves2
(opened 2001)
$ 2,603
$ 3,610
2.5%
4.9%
N/A
N/A
SAVINGS ACCT.
First National Bank1,3
(opened 1983)
$ 518
2.0%
N/A
CASH ON HAND
Desk drawer at home
$ 340
N/A
N/A
VESTED PENSION
401(k)-DeVitt Consulting
See Security Investments
$ 558
SECURITY INVESTMENTS
Cost Cu
ent Value
Security
# Shares
Date Acquired Per Share Total Per Share Total
AT&T2