Getting It All Together

Jacqueline & Kim Jackson are squashed between their family's finances

Jacqueline Jackson is part of the “sandwich generation,” a generation squeezed between the demands of their children and the responsibility they feel to their aging parents. She and her husband, Kim, both 37, have a household income of $85,000 and own a home in Powder Springs, Georgia. Jacqueline works as an underwriting consultant for Aetna Insurance Co. and Kim serves as a field engineer for Fuji Medical Systems. Whereas many couples in their situation fail to plan, the Jacksons have strong financial goals for their family, which include building an emergency fund (six month’s worth of living expenses) and financing a college education for their 8-year-old daughter Paris.

But when Jacqueline’s parents, who lived in Nashville, Tennessee, became ill, the Jacksons’ financial plans were sidetracked. “My mother was already in a nursing home, having suffered a stroke. My father, who had been living in the family house where I grew up, started having health problems. We moved him into assisted living,” says Jacqueline. “Because I am an only child, he deeded the house to me.”

Jacqueline’s father had begun renovating his home and was in the process of adding two additional rooms. In order to complete the project, the Jacksons secured a $39,000 home equity loan on the 40-year-old house, $27,000 of which was used to make renovations. The couple has since completed a bedroom, bathroom, and two-car garage. Since the home was paid for, Jacqueline planned to rent it out for extra income. The couple used the remaining $12,000 to pay off their credit card balances. In addition to their monthly mortgage of $928, they now have a $360 monthly payment on their home equity loan. Until they find a boarder, they must also pay utilities on the family home. Another added burden: Jacqueline’s father’s $7,000 car note. “To reassure my father that he wouldn’t spend all of his Social Security on his living expenses, we took over the loan on a new truck he purchased last year,” says Jacqueline, whose mother passed away in October 2002.

Further complicating matters, the home repairs have actually cost $39,000, which means the Jacksons have a $12,000 shortfall. Jacqueline says she may have to dip into her father’s savings for half the money and will sell her stock options, which are valued at $3,700, only if she absolutely has to. She is adamant about not borrowing against her 401(k), which is currently valued at $12,000. She has $3,700 in stock options, a $1,195 stake in an investment club, and shares of Home Depot and Aetna stock that are valued at $1,000. Kim has almost $15,000 in his company’s profit-sharing plan, but he won’t be fully vested until August 2003.
“We have two households to take care of,” says Jacqueline. “Like most people, family circumstances took a toll on our finances.”

THE ADVICE
To help get their financial plan back on track, BLACK ENTERPRISE asked Sterling Laylock of Atlanta-based Sterling Financial Advisors to consult with the couple. In addition to suggesting that the couple add their $2,000 contest

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