Ã¯Â¿Â½PAGE Ã¯Â¿Â½ Ã¯Â¿Â½PAGE Ã¯Â¿Â½6Ã¯Â¿Â½ Unit 3 IP
Unit 3 Individual Project
Personal Finance Concepts
May 17, 2007
Tom and Sue Wright are planning for their family's future. In the event that one of them would die, they would like the survivors to be able to comfortably maintain their current lifestyle. The planning they complete now will save the remaining family members from undue financial hardship. This process may seem daunting, but taking it step by step, the Wrights can easily plan for their financial future in the event of a death.
The family maintenance fund is an integral part of planning for your family's future. This fund will provide the remaining family members with the extra money they will need to maintain their current standard of living when one spouse is no longer alive. This will lessen the financial burden on the survivors. With a total loss of one income, a family could be financially devastated very quickly.
The surviving parent may be forced to get a second job, sell the house, or other drastic measure in order to keep 'afloat'. It is for this reason that the family maintenance fund is so important. Calculating a family maintenance fund is basically a five step process.
The Wrights have begun calculating the amount they will need in a family maintenance fund. This is the first step in the process; finding the monthly expenses of the survivors. The amount must assume that one adult has died. Expenses such as an extra car and extra lunch costs may not be needed but child care might be necessary. They estimate the remaining family members will need about 75% of their current combined take home pay of $80,000. They have also found that they will need an extra $50 a month for child...