Your responses should be 50 words for each question. They should demonstrate your understanding of the concepts at hand and your ability to apply these concepts to the case study situation. Your ability to communicate your points clearly and concisely, demonstrating professional-level writing skills, will impact your grade.

Michelle Jones is a recent graduate of Johnson C. Smith University (JCSU). She received
a BS in Business Administration with a concentration in Finance. She successfully completed an
internship with Branch Banking and Trust (BB&T) while at JCSU and joined the bank full-time
after graduation as a Credit Analyst. Michelle was supported financially by her parents while in
college. Now she is on her own and must face the challenges of being an adult. Michelle felt naïve
about managing her finances so she reached out to one of her Finance Professors at JCSU for
advice. This is where the “fun” begins.
Michelle Jones was fortunate to have parents who could pay her college expenses and
provide her with periodic spending money. The spending money was never enough, however.
There was always that one new outfit that she just had to have. She had a meal plan, but the food
in the cafeteria was not satisfactory. She frequently joined her friends for meals off campus. No
problem. She had a credit card.
Mr. Jones often talked to Michelle about managing her money. There were two things that
her father said that made a lasting impression. “All college students should establish and maintain
a cash emergency fund and they should establish credit.” Michelle took this advice to heart. She
opened up a savings account at BB&T for her emergency fund. In order to establish her credit
history, Michelle applied for and received a MasterCard. She was not overly concerned with the
finance charge and method of calculation because she planned to pay her balance in full each
month. Her primary concern was the avoidance of an annual fee. Further, she preferred a card that
offered a long grace period. The grace period is the number of days from the statement date that
Proceedings of the International Academy for Case Studies Volume 22, Number 1
the card holder has to pay the balance in full and avoid a finance charge. Paying off the balance
prior to the end of the grace period allows the card holder to utilize the float (i.e. earn interest on
monies until payment is made).
Michelle opened accounts at Belk, a regional department store, and her favorite retailer,
Victoria’s Secret. Michelle heard that it was advisable to open different types of credit in order to
improve one’s credit score. She routinely checked her credit file using
She knew that checking one’s bank and charge card statements regularly is a primary safeguard
against identity theft. Michelle was also advised to check her credit file at each of the three credit
bureaus periodically to ensure that there were no errors or unauthorized transactions. Errors should
be reported to the credit bureau in writing immediately.
Each credit bureau generates its own credit score. More recently, the credit bureaus jointly
created the VantageScore. VantageScore 3.0 ranges from 300 to 850. Most lenders, however, rely
on one’s FICO score,, when making credit decisions and/or determining the
interest rate to be charged. FICO scores range from 300 to 850. A FICO score of 800 or above is
considered excellent. A good score ranges from 700 – 799. A fair score is 650 – 699. A score
below 650 is considered poor. One of Michelle’s goals is to improve her credit score. She did some
research to identify the determinants of one’s FICO score. Michelle learned that a FICO score is
computed based on the following components and weights (Weston, 2012):
Types of credit maintained – 10%
History of timely payments – 35%
Amount owed relative to credit limits – 30%
Length of credit history – 15%
New credit – 10%
The most weight is given to one’s history of making timely payments. Accordingly, the
earlier a student establishes credit and makes payments on a timely basis, the higher his/her FICO
score will be. Michelle also learned that it is best to maintain a balance of less than 30% of one’s
credit limit. This computation is made for each credit and in total. Note that one’s income or net
worth is not factored into one’s credit score. Also, note that applying to open several different
accounts in a relatively short period of time will adversely affect one’s credit score. This will not
occur if the applicant is merely shopping for the same type of credit (i.e., a mortgage) at different
Michelle remained in Charlotte after graduation. She currently works as a Credit Analyst
at BB&T. She decided to live with her parents in order to save money. One year after graduation,
Michelle’s mom said, “It is time for you to move out of my house.” She turned to her dad. Surely,
he wouldn’t make her move. Michelle was crushed when her dad stated that it was time for her to
Michelle drives a Honda Accord. The Joneses purchased the car used. It now has a current
value of $9,992 per Kelly Blue Book. Hondas are noted for great gas mileage, reliability and
relatively low repair costs. Michelle enjoyed driving the Honda while a student. Now, she believes
it is time for a new car. “My Honda does not convey the image that I would like to project.”
Michelle has accumulated $5,000 in personal savings. Her checking account balance is
currently $1,500. Additional assets consist of her car, value of clothing ($2,000), jewelry ($2,500),
Proceedings of the International Academy for Case Studies Volume 22, Number 1
electronics ($2,200), furniture ($1,200) and the balance in her 401(k). She has utilized her credit
cards to make purchases of clothing, jewelry and household possessions. It is her intent to pay her
credit card balance in full each month. Unfortunately, she has not done so. Currently, she has credit
card debt of $2,687. The monthly minimum payment is $35. The annual finance charge is 18%.
Michelle agreed to obtain her own auto coverage and cell phone plan since she now has “a
real job.” The days of “living off her parents” are over! She really does want to become more selfsufficient.
Michelle ventured into a BMW dealership one rainy Saturday afternoon. She had no
intention of buying a car that day. She was greeted by an enthusiastic salesperson. A few hours
later, she drove off the lot in a brand new red BMW 3 series.
Michelle was very proud of her new car and her newfound negotiation skills. With some
counsel from her brother, Trevor, and after several “back and forth offers” and threats to leave,
Michelle negotiated a purchase price of $39,100 with a trade-in allowance of $8,300. BMW was
offering incentive financing on the car she selected. She financed her purchase at 0.9% for 60
months. Clearly, establishing a favorable credit history early paid off.
Michelle obtained a quote from three auto insurers. She learned that she could have
maintained a liability only policy on the Honda, but must maintain full coverage on the new car
since it is financed. Liability protects others in the event that there is an accident and Michelle is
deemed to be at fault. Collision provides for reimbursement in the event her car is damaged in an
accident and she is at fault. Comprehensive provides coverage against theft, fire, hail, etc. Michelle
must decide on an appropriate deductible. The deductible is the out-of-pocket expense that
Michelle will incur if there is an accident and there are damages to her car and she is at fault. A
higher deductible of $250, $500, $1,000 or more results in a lower premium, but increases the
amount of financial risk assumed by the insured.
Michelle has been diligent about contributing 3% of her salary to the 401(k) plan offered
by BB&T. BB&T matches the first 6% of employee contributions. The current balance in her
401(k) is $3,128. Her current allocation is 80% stable value fund and 20% money market fund.
She has not researched the investment options available in her 401(k), but says, “I can’t afford to
lose my money.” Michelle has chosen the two most conservative options from a menu of
investment choices.
Michelle expects to receive a tax refund of approximately $600. She has been using a tax
preparation service to prepare her Federal and state tax returns. Of course, she incurs a fee for this
service. Michelle should be able to complete her own tax return because her return is fairly
straightforward (i.e., she doesn’t itemize deductions). Her friend suggested that she use the IRS
free-file program. There is no charge for the Federal return and the charge for the state return is
nominal. Michelle’s friend also suggested that she increase the number of her withholding
allowances in order to reduce the amount of taxes withheld each paycheck. This would reduce her
refund check, but it would increase her take-home pay throughout the year. This is accomplished
by completing and submitting a W-9 form to one’s employer.
Proceedings of the International Academy for Case Studies Volume 22, Number 1
Michelle felt ill-prepared and overwhelmed to “take charge” of her finances. A personal
finance class was not offered at JCSU when she attended. She believed that assistance from a
professional financial planner was required. Michelle remembered that one of her professors had
practiced for years as a Financial Planner. She emailed Dr. Thomas to request a meeting. Dr.
Thomas informed her that he had retired as a Financial Planner. Further, it would be difficult to
refer her to a professional planner because she really didn’t have sufficient assets at this stage of
her life to justify paying a fee. Dr. Thomas agreed to meet with Michelle. He stated that he would
be willing to assess her current financial situation and provide recommendations. There would be
no charge for this meeting.
During their meeting, Michelle was asked, “What are your goals?” She offered the
following: to be wealthy, to own a home, to marry and have two children, to obtain an MBA, to
move up the corporate ladder, and to be financially independent at age 60.
Dr. Thomas suggested that Michelle formulate short, intermediate and long-term goals.
Short-term goals should include those things Michelle wants to accomplish within the next twelve
months. Intermediate term goals are those to be accomplished between one and five years. Longterm goals are those with a target date for accomplishment more than five years away. Dr. Thomas
also commented on the quality of Michelle’s goal statements. They lack a timeframe and aren’t
measureable. Effective goal statements are: SMART – specific, measureable, attainable, realistic,
and have a timeframe for accomplishment.
Dr. Thomas was pleasantly surprised to learn that Michelle had prepared a monthly budget.
Dr. Thomas asked Michelle how she formulated her budget. She said, “I estimated the amounts
based on what I thought I was spending”. She provided the budget shown in Table 1. Dr. Thomas
asked if she compared her actual expenses to her monthly budget. Michelle answered, “No”. Dr.
Thomas suggested that she maintain a record of her spending for the next six months using a
manual spending log or an online service such as Mint makes it easy to track spending
and generate Personal Financial Statements. It is a free service. Once Michelle’s budget is revised,
he implored her to compare actual expenses to budgeted amounts on a monthly basis. This will
allow her to identify favorable and unfavorable variances. Spending less than budgeted or
receiving more income than budgeted is a favorable variance. Conversely, spending more than
budgeted or receiving less income than budgeted is an unfavorable variance.
Table 1
Take Home Pay $3,418
Gas 120
Eating Out 125
Clothing 250
Travel 300
Personal Grooming 120
Gifts 60
Savings 500
Total Expenses 1,475
Monthly Surplus $ 1,943
Proceedings of the International Academy for Case Studies Volume 22, Number 1
“What should I do to manage my finances more effectively?” Michelle asked. Dr. Thomas
responded, “There are no magic answers. This is going to take time and a great deal of discipline
on your part. Let’s get started!”
Dr. Thomas advised Michelle to prepare a Personal Balance Sheet (Walker & Walker,
2013). This statement will show the value of the things she owns (assets) and the amount of debt
that she currently has (liabilities). Assets are valued at fair market value (what one would receive
for the items if they are sold in an arms-length transaction) as of the Balance Sheet date. The
purchase price of the items is immaterial. One’s net worth can then be computed by subtracting
total liabilities from total assets. It is not uncommon for college students and recent graduates to
have a negative net worth. This is largely driven by student loan balances. Michelle was also
instructed to maintain a spending log and revise her budget (Kapoor, Dlablay, Hughes & Hart,
Michelle’s head was spinning. This sounded like a lot of work on her part. Nonetheless,
she left Dr. Thomas’ office determined to complete her “homework assignments” and to become
much more astute at managing her finances.

Research Paper 101
Calculate your paper price
Pages (550 words)
Approximate price: -

Reasons to trust Research Paper 101

On Time Delivery

We pride ourselves in meeting the deadlines of our customers. We take your order, assign a writer but allow some more time for ourselves to edit the paper before delivering to you. You are guaranteed a flawless paper on a timely manner...

24x7 Customer Live Support

Our team at Research Paper 101 is committed to handling your paper according to the specfications and are available 24*7 for communication. Whenever you need a quick help, you can talk to our writers via the system messaging or contact support via live chat and we will deliver your message instantly.

Experienced Subject Experts

Online Experts from Research Paper 101 are qualified both academically and in their experiences. Many are Masters and Phd holders and therefore, are qualified to handle complex assignments that require critical thinking and analyses...

Customer Satisfaction

We offer dissertation papers as per students’ wishes. We also help craft out the best topics and design concept papers. By ordering with us, you are guaranteed of defending and making through those hard faced professors in the defense panel!

100% Plagiarism Free

We at Research Paper 101 take plagiarism as a serious offence. From the start, we train our writers to write all their papers from scratch. We also check if the papers have been cited appropriately. Our website also has a tool designed to check for plagiarism that has been made erroniusly. In essense, the paper you get will be 100% legit...

Affordable Prices

We understand that being a student is very challenging, some students balance between work and studies in order to survive. We therefore offer pocket friendly rates that are very competitive in the market.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.