Name:
Mark and Rebecca
Age:
31 and 30
Profession:
Computer Programmer and Accountant
Primary Goal:
Determine whether they can financially support Rebecca’s desire to leave her job and start her own Business.
Mark and Rebecca met in college, and have worked diligently to build their professional careers shortly after they both graduated with their respective degrees. They’ve always valued being responsible and saving for their future, but they also love to travel and to experience new countries any opportunity they get. Recently, they’ve embarked on a new journey together, and welcomed a baby boy, Ethan, to their now growing family.
Mark really enjoys his work, particularly the fact that he can work from home and the additional flexibility this affords him. He’s also been fortunate to continue to move up within his company, and is very respected by his peers. He has a 401(k) and stock options as part of his role in the company. Rebecca has worked hard to get where she’s at, but she grew up in a family who owned a small business, and has always felt the same entrepreneurial itch.
The Challenge
With the birth of their new son, Ethan, Rebecca feels like now is the perfect time to take the entrepreneurial leap. Doing so can allow her to stay home with Ethan and be a part of his development, while also beginning to build her business at the same time. Mark has always supported Rebecca and wants her to follow her goals, but they both wonder whether they can afford to live off of just his income moving forward.
They had several other questions:
- How do we balance how much we need to be saving for our future, with the present goals we have today?
- Are there any benefits related to Rebecca’s student loan payments if we file our tax return separately instead of jointly?
- How much money do we need to have set aside as a runway for Rebecca to start her own business?
- Should we start a college savings plan for Ethan?
- What are the appropriate legal documents we need to have in place now that we have a child?
- Can we afford to continue to budget travel into our plan?
Both Mark and Rebecca acknowledged that with their new goals, and the financial implications of them, it made sense to contact a financial professional who could help talk through their goals and come up with a plan they felt confidence in.
The Approach
The first step with Mark and Rebecca was to get crystal clear on their current cash flow to determine whether they could afford to live off of Mark’s income as Rebecca begins to build her business. Then, everyone agreed it was very important to prioritize the various goals Mark and Rebecca have, identifying which goals were short, mid, and long-term. From there, we could build a financial plan that accurately reflected and prioritized their vision and goals.
The Result
After several meetings and ongoing discussions with their team of advisors, the solutions adopted by Mark and Rebecca helped them in many ways:
- Rebecca was able to leave her 9-5 job as an Accountant, and after a few meetings with a business coach, she is thrilled about starting her new business venture.
- They were able to feel comfortable temporarily reducing Mark’s 401(k) retirement savings to help focus on their short-term goals, and not feel worried doing so would put them far behind on their long-term goals.
- Through extensive student loan and tax planning, and the help of a CPA, they were able to significantly reduce Rebecca’s income-based student loan payment
- By way of a referral to a local estate planning attorney, Mark and Rebecca have the necessary legal documents in place and the peace of mind knowing if something were to happen to one or both of them, their wishes for Ethan’s future are outlined on paper.
Today, Mark and Rebecca are able to both work remotely now, and even have plans to spend a few weeks later this year on the west coast with Ethan, working remotely and enjoying the southern California sunshine. Best of all, they’re able to both fully participate in Ethan’s development, while not feeling like their financial future has to suffer because of it.