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Case Study
“How do we maximize our excess income?”
Initial Situation
- Age: Kurt, 30 | Katie, 29
- Feeling: Anxious
- Goals:
- Paydown student loans
- Prepare for new baby
- Maximize excess income
- Income: $240,000
- Investments: ~$150,000
Katie and Kurt had been married for three years when we started working with them. A dual-income household with their first child on the way, they wanted to make sure they were budgeting and saving well to prepare for their future.
Kurt, a nurse, wanted know how to handle his $80,000 student loan balance that weighed on him. Given COVID relief, there were programs that provided other options.
Situation Now
- Status: Happy parents adjust to life with a baby
- Feeling: Tired from the baby but confident in their future
- New questions:
- Should we reduce our spending to save even more?
- Should we buy rental property?
Katie and Kurt now have a healthy baby girl Avery who is the main focus of their lives.
After Avery was born, Katie and Kurt each purchased $750,000 in term life insurance to ensure Avery’s future was protected.
The couple is maximizing their $60,000 in excess cash flow by maxing out their 401(k) plans, contributing to a 529 plan for Avery’s college, and overpaying on student loans to accelerate debt reduction.
Their investment portfolio is up over 33% in less than 18 months given strong savings and market returns.
How we helped Katie & Kurt
Like we do with all clients, we used our Cypress Wayfinder process. We took stock of their current financial status and mapped out their base case future.
This process allowed us to determine how much Katie and Kurt could likely save each year. We showed them what decisions they’d need to make to accomplish their goals of sending their baby to college while also being able to retire early at age 60.
We researched the Public Service Loan Forgiveness program given Kurt’s work at a non-profit hospital. Hiis income was too high to qualify, but we showed the couple the benefits of refinancing Kurt’s student loans and accelerating payments.
We gave the couple specific recommendations for monthly budgeting and savings which they’ve been able to follow since working with them with a few adjustments based on life changes.
The client stories are based upon the specific client circumstances, each of which had a particular set of goals and objectives. The services described in these stories may differ from services provided to other clients, and the results achieved may not be similar, as every client’s goals and objectives are unique.
