Reference no: EM132654500
Family 1: Peta and Ruth, ages 27 and 31 respectively, are new homeowners. They do not have any children at the moment and do not expect to have any. They do have 3 cats and 2 dogs. The value of their home is $950,000, they used all their savings and got some help from their parents to buy their house. Their mortgage is still $850,000. This is affordable because Peta and Ruth both have good paying jobs earning around $90,000 each. They feel they don't have to worry about money because of their income. So they buy only the best quality products. Ruth works as a dentist and Peta works as an information architect. Ruth is worried about arthritis in her hands as her mother and father suffered terribly from this at 50 years old.
Family 2: Betty is a graphic designer aged 34. She has one child called Rhonda, who is 2 years old. Betty has just returned to work and earns $70,000 p.a. Rhonda's father is not involved in the family. He left Canada and refuses to pay child support. Luckily, Betty was an avid saver. She used her savings as a down deposit on a modest sized condo valued at $550,000 and has a mortgage of $400,000. She also has a TFSA with $25,000 for an emergency. Betty's health is a good state, but she is very mentally stressed from working fulltime whilst being the sole carer of Rhonda.
REQUIRED:
a) Identify the stage of the life cycle each family is in.
b) Describe the financial priorities for this stage.
c) Identify how each couple differs in their financial needs and explain why.