Steve and Maria Henderson, both attorneys, have moved around a lot since they got married. There were colleges and law school, and then, internships and some pro-bono work in an economically depressed area of the US. Now they’re in Massachusetts and are considering making it their permanent home. They’re even contemplating making the switch from renters to owners.
Steve works for Legal Aid, defending indigent clients, and Maria works for an organization that helps women prisoners appeal their sentences. They’re devoted to helping those less fortunate so even though they’re both thinking of making career changes, they plan to continue to work for these groups on a volunteer basis. Maria is considering a move to academia and Steve to a Boston law firm.
The couple have one child, Hunter, who just turned 6, and they plan to have at least one more. They’ve saved $200k and have $180k in student loans.
The Hendersons came to Sensible Financial to learn how much they should be saving for retirement, their son’s college fund, and a potential home purchase. They also wanted help with organizing their finances, paying off their student loans intelligently, and discovering how their job choices might affect their financial condition.
Immediately after receiving their financial information, the Hendersons’ financial advisor noticed that Steve had not enrolled in his employer’s long-term disability plan. We were able to communicate with a representative from his HR department and help him to enroll in the plan quickly before the open enrollment period ended. Having no disability insurance coverage would have presented a major risk to their financial plan since Steve and Maria’s earnings represent a significant portion of their lifetime resources.
During the planning process, we provided them with a prioritized savings plan. We helped them understand the importance and the mechanics of:
- Contributing enough to receive full employer matches on their retirement accounts
- Building an emergency fund
- Increasing their student loan payments beyond the minimum payment
- Starting and contributing to 529 plans for their son and any future children
- Adding to their retirement savings
- Saving for a down payment on a house
We were also able to show Steve and Maria how their financial lives would change if they chose different career paths. For Steve, a move to a Boston law firm would provide their family a significantly higher living standard than if he were to continue in his current position. If Maria switched to a career in academia, they’d also have more resources. Buying rather than renting a home also made a big difference.
By showing Steve and Maria how to organize their savings and prioritize their spending to meet their long-term goals, their Sensible Financial advisor was able to furnish them with a clear view of their financial picture while pointing out ways to decrease their debt and increase their savings. This information will enable them to make more informed decisions about their careers and their future.
The Hendersons haven’t decided whether to change jobs or buy a home just yet, but they have options and an unobstructed view of what lies ahead.