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The Continuing Saga of Sam and Judy Part Two It has been a year since Sam and Judy graduated and they have both done well in their jobs. They have each received promotions and pay-raises. Sam is now earning $35,000 and Judy is earning $36,000 so they now have take-home pay of $3550. They are still living with Sam’s parents and have agreed to start chipping in for rent and utilities. They are now paying $400 per month rent and another $200 a month for utilities. Their financial statistics are now: Gross Annual Income: Sam: $35,000 Judy: $36,000 $71,000 Total Net Monthly Income (assuming withholding at 40%) $3,550 Their monthly expenses are: Rent Utilities Student loan Car loan: Car insurance Commuting costs Food at home Food and Entertainment Dry Cleaning Miscellaneous $400 $200 $300 $350 $225 $263 $300 $300 $400 $400 They have the “things,” clothing, athletic equipment, computers, iPods, cell phones, TVs, etc. that we saw in Assignment 1 but they feel frustrated because there are a number of items that they want to have but they don’t have the money to buy them. The things that they want to buy are: 1.) A new camera: When they were on their honeymoon Sam was upset because they weren’t able to take pictures to augment their wedding album. Sam has taken a look at the new Nikon cameras and can get a terrific package for $900. 2.) A second car, so that they can run errands separately on the weekend. They also are pretty sure that they will need two cars when they get their own place. They are pretty sure that they can get a used car for about $11,000. 3.) A 52” LCD television. They are both sports fans and love the idea of being able to watch games at home on a big screen. They figure that they will need to pay $2500 for the model that they want. 4.) A wardrobe that is suitable for business wear. They both have nice clothes that were appropriate for student life, but they do not have the kind of clothes that they need to work in an office. They think that they will each need to spend at least $1500 just to get the basics. Your assignment is to: 1.) Discuss what are the different kinds of credit that is available that would allow them to purchase the things that they want. 2.) Make your recommendations for them regarding what they should buy and when they should buy it and what kind of credit/loan they should use. Talk about why you are making your recommendations. 3.) Include an estimate on the monthly cost of each of the loans that they decide to use to purchase things. 4.) Prepare a budget that shows how their the rent and utilities as well as any purchase that they make will impact their financial situation.
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Case study assignment
Types of credit available to Sam and Judy
Credit varies from one form to another making them unequal. Since there are many forms
of credit available to consumers getting conversant with credit types can help someone become a
better credit consumer. There are four types of credits, i.e., secured, unsecured, revolving and
installment (Hibbeln & Martin 2012).
Secured credit is the kind of credit where the borrower is required to put a lien on the
asset he/she owns. The creditor is entitled to take the asset if the borrower fails to live up to the
terms of credit agreement put in place. The common types of secured credit are mortgages, car
loans, and home equity loans (Hibbeln & Martin 2012).
The unsecured credit is forms of c...

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