Prescription for prosperity: a financial planner assesses the goals of an African American family - and offers advice on achieving them

Black Enterprise, Jan, 1996 by Juliette Fairley

WHEN LAWRENCE AND LESLIE Moore got married in August of 1994, they fantasized about leaving New York City to find a better life "down South." A month later, their dream became reality when they both secured job transfers to the Peach state. Soon, they were packing their bags and heading for Atlanta.

"We wanted to get a fresh start, and I've always wanted to come down South," Lawrence says. "We knew it would be difficult to own a home in New York, and we wanted things a little slower."

It didn't take long for the newlyweds to get settled. Within a year of their move, the Moores bought a 1,980-sq.-ft. home for $96,000 in Rex, a suburb 17 miles south of Atlanta. And within days of closing on their home, Leslie gave birth to Lawrence Jr., the couple's first child.

Getting married, having a baby and buying a home are emotionally and financially charged events, and they can be especially taxing when they occur all at once. The Moores even bought two new cars within eight months.

"We feel good," says Leslie, as she cuddles their nine-month-old baby. "We're not worried. The freezer is full, we've got gas in the car and we thank God that we don't have to live paycheck to paycheck."

But should they be worried? Like too many of us, they have high credit card debts, inadequate life insurance, they're paying too high an interest rate on their home mortgage and they're not properly tracking their expenses.

Their situation is far from dire, but they do need to take steps to rein in expenses and adequately provide for the future. If they don't, an unexpected event, such as a job loss or an uncovered medical expense, could wreak havoc with their future.

To help them plan, BLACK ENTERPRISE matched the Moores with a certified financial planner who offered them specific advice.

DREAMS, DRAPES AND DEBITS

Lawrence, 31, works as a staff claims representative with Allstate Insurance Co., while Leslie, 27, does the same work for another major insurance firm, which she declined to identify. They earn a combined annual salary of $72,000.

They have ambitious financial goals. The Moores wish to retire at age 50. But first they want to own their own business, buy a larger house that has more land, have a few more children and send those children to college.

Lawrence is also interested in attending graduate school, and Leslie says she eventually wants to finish her undergraduate studies.

Right now, the task of fulfilling their goals appears to be next to impossible, especially with $600 in car payments for their two brand-new Honda Civics and a $900 mortgage. They also have Visa and Discover cards that have 17% and 18% interest rates respectively and a total debt balance of $6,000.

With their new home and child, the native New Yorkers have several needs. For example, they haven't finished furnishing their home, and some of their windows don't have curtains. "It's not where we want to be 10 years from now, but it [all] happened so fast," Lawrence says. "We're conservative and we're not trying to keep up with the Joneses. We're living within our means."

To make ends meet, the Moores have made some sacrifices. They don't go out to eat very often, and their last vacation was their Florida honeymoon a year ago. In addition, Leslie hasn't bought herself any new clothes lately, and Larry has delayed buying garden tools. And instead of making purchases at the mall, Leslie just gazes at the comforters, decorator towels and draperies that she one day hopes to buy, while Lawrence prices camera equipment during those trips.

THE YELLOW BRICK ROAD

There is a bright spot. Larry has $4,300 tucked away in savings bonds, and he has $5,000 worth of stock certificates in an investment account. The Moores have also started saving for retirement with two 401(k) accounts.

To buy their home, the Moores withdrew $5,000 from Larry's pretax 401(k) account to use as a down payment. At press time, the balance in that account was $2,370. Larry is currently trying to build up his 401 (k) again. He contributes 11% of his income, or $345 monthly, which will give him $4,140 a year. Leslie puts in 8% of her income, or $200 monthly, equal to $2,400 a year. Both of their companies match a maximum of 6% of their contributions. With an average return on their 401 (k) investments, the Moores should accumulate a buffer to supplement other retirement ncome.

The Moores are currently paying $900 in property taxes for their home, which was recently appraised at $100,000. But under a Georgia Homestead Exemption tax break, they can lower their taxes by at least 30% because they are Georgia residents who live in their primarv residence and don't use it as an investment property.

There are definite advantages to living in Georgia. For one thing, the Moores may not have to worry about Lawrence Jr.'s college education. Under Georgia state law, if a child maintains a B average in high school, he or she is eligible to attend any state university free of charge.

A FAMILY AFFAIR

Overall, the Moores are in pretty good financial shape. But things have come quickly to the young couple. Their affairs could easily spiral out of control with just one emergency expense.