Jennifer's cash flow
on one income will be tight because the mortgage
payment represents a large portion of her
income. This is cause for concern, since it's
likely only a matter of time before she will
need funds for a major repair on her home
or automobile, which could result in debt.
We strongly recommend Jennifer seek child care assistance and, if possible, a cash settlement as part of the divorce settlement. Further, if her husband seeks any portion of their home equity, her cash flow problems will rise since she'll need a loan to "buy him out." Affordability of her home is something Jennifer needs to carefully consider. She should seek advice from her divorce attorney.
Invest wisely for son's education
Jennifer's son has inherited $25,000 in a trust to pay for college. At an assumed 8 percent annual compound rate of growth, the trust will grow to over $82,000 by the time her son is ready for college.