Case Study: David and Heather – Married with a Growing Family

While each family’s financial situation is unique, you likely share many of the same challenges as others we’ve helped.  The following case study illustrates how we help clients develop and implement solutions unique to their situation. 

How to navigate financial decisions while balancing expenses of a growing family with saving for the future?

Photo by Sergio VassioBackground

David (38) and Heather (32) have been married 8 years and have three children, ages 5, 3, and 9 months.  David is an engineer at an automotive manufacturing facility.  Heather is a part-time RN and a full-time mom.  They are quickly outgrowing their small three-bedroom house that they purchased when they were first married and would like to find something larger.  They have been saving into David’s 401k plan and have several investment accounts with different advisors, but aren’t sure if they are on the right track.  They were recently approached by an insurance agent from their community who was pushing them to shift most of their savings into a variable universal life (VUL) policy.  Their questions for us were:

  • Can they afford to upgrade to a larger home?
  • How much should they be saving for retirement?  For college?
  • Are they using the best investment vehicles?
  • Do they have sufficient life insurance?
  • Should they pursue the VUL policy recommended by the insurance agent?  

How did they go about hiring Accountable Financial Planning LLC?

After discussing their unique situation and goals with Andy Kerns, CFP ® during a free initial consultation, it was agreed that a one-year retainer service agreement with Accountable Financial Planning LLC would provide them with the best value.  Soon after the initial consultation, Andy followed up by sending them a retainer contract to review and a list of information for them to gather.  A week later, they had signed the contract, gathered the requested information, paid a portion of the retainer fee, and scheduled the first of a series of meetings with Andy.

How did Accountable Financial Planning help?

  • Organized Financial Information
    • Going through the process of collecting the requested information, brought to light the need for a more organized system for storing and accessing financial information.
    • We offered some easy-to-implement ideas.
  • Increased Financial Awareness
    • We developed a balance sheet, listing their assets, liabilities, and net worth.  Since Heather had taken the lead on most of the financial decisions in the past, David wasn’t even aware of the some of the items on the balance sheet until we reviewed it with them.
    • With David and Heather’s input, we developed a cash-flow statement, showing how their income was being spent (and/or saved).  The cash-flow exercise helped them realize how much they were spending on very discretionary items and other unaccounted-for items.
  • Prioritized Goals
    • Through discussions with David and Heather, it was determined that having sufficient life insurance coverage was the most important goal, followed by upgrading to a larger home, saving for retirement, and, lastly, saving for college.
  • Developed a Plan for Achieving Short and Long-term Goals
    • We prepared several cash-flow projections to determine how much home they could afford, keeping their other goals in mind.
    • We prepared several goal (retirement, college) projections to give them a sense of how much they should be savings towards these goals.
    • We helped them mutually decide how much of their available cash flow to allocate towards their various objectives.
  • Reduced Investment Expenses
    • David’s 401k plan, into which most of their savings was being contributed, had very high fees.  We were able to help him switch to lower-cost funds inside the plan and redirect much of their savings into IRAs with ultra low-cost funds.
    • They also had several small commission-based mutual fund accounts with different advisors.  The funds in these accounts had high annual fees.  We helped them consolidate the accounts at a single custodian and replace the high-cost funds with low-cost funds without negative income tax consequences.
  • Optimized Portfolio Strategies
    • We created a snapshot of their overall investment portfolio and determined that they had very little diversification, even though they owned multiple funds at different custodians and with different advisors.
    • We developed a highly diversified target portfolio based on their need for return and tolerance for risk.
    • We made specific investment recommendations for their various accounts, improving their overall diversification and income tax efficiency.
  • Eliminated Unnecessary Insurance Costs
    • We conducted an analysis and made recommendations for how much life insurance David and Heather should each have in place.
    • We reviewed the variable universal life proposal being recommended by their friendly insurance agent and concluded that the fees were extremely high and would not be an appropriate investment vehicle.
    • We obtained quotes for appropriate low-cost term life insurance policies, which they put in place to supplement their employer-paid group coverage.
    • We reviewed their home, auto, and liability policies and made recommendations for modifications to their current coverage.  We obtained quotes from other quality carriers to compare costs.  In the end, they switched carriers because they could obtain better coverage for significantly less cost than they were currently paying.
  • Helped Plan for the Unexpected
    • Other than medical directives, David and Heather had no estate planning documents in place.  They had been planning to get wills ever since they had children, but never got around to it.
    • We helped them engage a local estate planning attorney who was able to help them execute documents that would allow their wishes to be carried out, including controlling how their assets and life insurance proceeds would be distributed to and for their children.
    • We reviewed their beneficiary designations and helped them make the changes necessary to properly coordinate with their new estate planning documents.
  • Helped Make Goal of New Home A Reality
    • Heather and David found a (much larger) well-priced bank-owned home in a great location.  They made an offer and it was accepted.
    • Working with a local bank, we helped them modify the terms of their current mortgage so that they could qualify for a conventional mortgage on the new home.
    • We obtained mortgage quotes from several lenders and helped Heather and David crunch the numbers and choose the best offer.
    • Since they were having trouble selling their current home, working with a local attorney, we helped them negotiate a land contract with an interested buyer who was having trouble obtaining traditional financing due to a recent divorce.

How is Accountable Financial Planning LLC helping now?

Heather and David have renewed their retainer agreement each year with Accountable Financial Planning LLC.  They realize the value that this relationship provides and appreciate having an advisor they know they can trust and who can offer insight and guidance on all kinds of financial issues that arise during the course of life.  We have a scheduled financial plan review meeting once per year and conduct scheduled portfolio reviews twice per year.  We are available at any-time during the year to help with other financial matters that arise.  We also help with the preparation of their income tax returns (under a separate agreement) during tax season.


This Case Study is hypothetical in nature and is not intended to be a testimonial or endorsement of Accountable Financial Planning LLC. The scenario presented is intended to illustrate services available at Accountable Financial Planning LLC, but does not necessarily represent the results or experience of actual clients. The strategies discussed are not appropriate for everyone and should not be considered investment or tax advice. Clients should review their unique situation and financial needs with a qualified advisor and inquire about the various benefits and risks involved with specific services and strategies.