THE NATIONAL PERSONAL FINANCE CHALLENGE

CASE STUDY ANALYSIS COMPETITION

INSTRUCTIONS FOR STUDENT TEAMS

Each team will have 1-hour and 55 minutes to work together to come up with a financial plan based on a
detailed fictitious family scenario (case study). Each team will create a PowerPoint presentation and
present to a panel of expert judges. Teams will have up to fifteen (15) minutes to present and an
additional five (5) minutes to respond to questions.

● Teams will be provided with the same fictitious family scenario (case study).
● Team members will work together and be provided a breakout Zoom room.
● Each team and Zoom room will be monitored by a proctor.
● Students are responsible for their own stable Wi-Fi access.
● Teams are welcome to use any presentation software they have access to: PowerPoint, Google
slides, etc.
○ Students will email their final presentation to (1)
[email protected], (2) Caleb Larson
<[email protected]>, and (3) Jennifer Davidson <[email protected]>.
Students must name their presentation file as “State_School”.

Judges have been given the following criteria to use in evaluating presentations:

● Knowledge of personal finance issues displayed in presentation (80% of total)

● Teamwork displayed (10% of total)
● Presentation/communication skills, including dress (10% of total)
____________________

GOOD LUCK, HAVE FUN, AND REMEMBER THAT YOU ARE ALREADY CHAMPIONS!
 CEE Case Study Draft

FAMILY FINANCIAL PROFILE

Family members:

The following narrative describes some details about the fictional Hernandéz family, a couple with two
children. Their financial circumstances are as follows:

Name (age) Employment Annual Gross Salary Credit Score

Daniel Hernandéz (33) Truck Driver $50,000 680

Gabriela Hernandéz (32) Hotel Room Attendant $20,000 None

Sofia (8)

David (5)

Daniel and Gabriela Hernandéz are Mexican-Americans who live in a large U.S. metropolitan city in the
southeast. They both have working visas and hope to apply for green cards some day.

Both speak excellent English. Gabriela graduated from high school. Daniel completed his GED three
years ago. Both of their children were born in the U.S.

The Hernandézes have mentioned not knowing much about finances. Both sets of their parents live in
Mexico where many of the financial systems are different.

Their combined salaries are about $70,000 a year, or $5,830 a month before taxes. After taxes, it’s about
$52,500 a year.

The Hernandézes have come to you to help them improve their current financial situation and work
toward their financial goals.

GOALS

In their current situation, Daniel and Gabriela don’t see any way that they could ever retire. But they
would like to work toward a plan where they could afford for at least one of them to exclusively work
part-time by the time they are in their 50s.

While they want to do the best for their children, neither Daniel nor Gabriela see any way they can send
their children to college. Because they don’t trust credit, they don’t think they would ever take out
student loans for their children.

Both Daniel and Gabriela would like to pay down their credit card debt and pay off their car loan. They’d
like to save to buy a more reliable car.

Although they’re ok with where they’re living now, they learned when they rented this house that most
landlords wouldn’t rent to them because they didn’t have a credit score at the time. Daniel has a credit
score now but Gabriela doesn’t. In a few years, they’d like to have a credit score that would let them
rent a home in a better neighborhood.
Both sets of parents told Daniel and Gabriela as children that saving was important. When they can,
Daniel and Gabriela send money to Gabriela’s parents in Mexico. Her parents then put the money in a
bank there to help the couple save to buy a home in Mexico one day. Daniel, however, isn’t sure he and
Gabriela should be doing this even though they want to be homeowners someday. They’d prefer to own
a home in the U.S. but they just don’t trust U.S. banks, in part because the fees are so high.

Daniel and Gabriela worry because they don’t have an emergency fund, nor any health or life insurance
right now, and just don’t see how they can afford it.

EMPLOYMENT

Daniel has a full-time job driving a truck for a supermarket franchise. The work is usually steady, but he
and others were laid off for about two weeks earlier this year. He’s back at work now and had been told
he’d be paid for those two weeks, but he hasn’t been paid yet. His work offers health insurance benefits
but Daniel has to pay part of the premium. Daniel could contribute to a 401k but he doesn’t know about
any other benefits.

Gabriela works for a company that provides cleaning services for hotels. Because she is considered an
independent contractor and not an employee, she isn’t eligible for any benefits. She does earn tips, but
they usually total less than $40 a week. Gabriela has worked steadily this year but was out of work for
two months in 2019 when she hurt her back. She has heard that if she could work for a hotel directly
rather than the service, the pay would be better and she would be eligible for benefits.

Gabriela’s sister lives in the same city. She’s unmarried and has a good job. She is willing to pay Gabriela
$100 to clean her house every two weeks whenever Gabriela needs extra cash.

SAVINGS

The only savings the Hernandézes have are the $1,500 they’ve sent to Mexico to save to buy a home
there. They don’t have an emergency fund.

INVESTMENTS

Daniel’s company has a 401k plan but he doesn’t participate because neither he nor Gabriela
understand it. They do know that putting money into a 401k means investing in stocks, and that seems
like a really bad idea—especially now. They have no investments.

INSURANCE

Last year, Daniel signed up for his company’s high deductible health insurance plan. The premiums were
low, but it seemed like they still had to pay for everything when they used medical care. So he and
Gabriela decided to drop the coverage this year. They have no life insurance.

They have liability-only coverage on their car and pay $700 a year in monthly payments of $58.33 a
month.

CREDIT

Gabriela has never used credit in her own name. Her parents taught her to be financially responsible
and using credit wasn’t part of that.
Until last year, when Gabriela was out of work, Daniel had never used credit either. But Daniel decided
to apply for two credit cards and he got both of them. At first he didn’t tell Gabriela because he knew
she wouldn’t approve. But he had to tell her when he missed a few payments and the credit card
company called. They have tried to use the cards only for emergencies.

One credit card has a credit limit of $1,000, an APR of 24%, and an outstanding balance of $600. The
second credit card has a credit limit of $1,200, an APR of 22%, and an outstanding balance of $700. The
late fee on both is $39. They try to make a payment on at least one of the cards every month. When
they make a payment, they always try to at least pay the minimum. They haven’t used either card this
year, but the balance doesn’t seem to be going down.

They own a 2012 Honda that Daniel bought from a friend who sells used cars. The friend financed the
car. The payment is $200 a month and the APR is 20%. When the car breaks down, as it often does, they
take public transportation or get a ride with a friend until they have enough money to get the car
repaired. They still owe 24 payments on the car. They try really hard to make the payment each month.

HOUSING

Three years ago, the Hernandézes rented a small three-bedroom home on the bus line. The rent is
$1,500 a month. The landlord is pretty good about making repairs when needed. This was one of the
few houses they could rent because, at the time, neither of them had a credit score. On average, their
utilities are about $150 a month.

CHECKING ACCOUNT

Daniel and Gabriela have a joint checking account at a local bank. They pay a monthly fee of $10
because they don’t keep very much in the account. About three times a year, they overdraft the
account. When they do, the fee is $30 each time.

The main reason they have the account is because their employers require that their paychecks be
automatically deposited. Because the Hernandézes don’t really trust banks, each month they withdraw
most of their pay as cash. This leaves only enough to pay the utility bills (set up on auto pay) and a bit
extra. They don’t trust ATMs so they cut up the ATM card the bank gave them. They keep the cash at
home and use it to pay for everything else.

TAXES

One thing that Daniel and Gabriela agree on is that it’s great that most years they get a big tax refund.
They paid a friend $600 to do their taxes this year, which seemed like a lot, but he got them a $5,000
refund which they should receive any day now! They plan to buy new clothes for the children, a new flat
screen TV, and a new couch. They also plan to pay $900 to fix the transmission on their car and send
some money to Gabriela’s parents in Mexico to put into their savings account there.

OTHER THINGS TO CONSIDER

The Hernandézes try really hard to manage their finances. They don’t eat out often or go to movie
theaters, but do enjoy spending time with friends. Although they don’t often talk about it, many of their
friends are in a similar financial situation and can’t afford to spend money on food or entertainment
either. The Hernandézes are regular attendees at their church and try to make at least a small donation
each Sunday.