Justin is married with one child. He works 40 hours each week at a rate of $16 per hour. His wife began working part time after their daughter was born, but still contributes about $350 to the cash inflow each month. Their monthly cash outflow is generally about $3,000. They have a balance of $2,000 in their savings account. Justin has retirement contributions taken out of his paycheck at work. They have renter’s, car and life insurance coverage.Based on this information, what part of their financial plan should Justin and his wife work on?
They bring in about $3,123 per month: Justin earns $16 × 40 × 52 ÷ 12, or about $2,773, and his wife adds about $350. Since their monthly outflow is about $3,000, they have little room to build savings, and their $2,000 balance may not cover unexpected expenses. They should focus on managing liquidity—keeping enough readily available cash for emergencies and short-term needs.
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