AnswersSkelton - GSN - Financial Math - MA2007Personal Budget

Personal Budget Answers

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21
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Tristan has found a good job as a bookkeeping clerk after finishing his associates degree at the local community college. He is making a beginning annual salary of $19,760. How can this increased income affect his financial decisions? Compare his previous budget when he worked part time while finishing his degree with his current budget after getting a full time job. Monthly Budget Previous Budget Current Budget Income Wages $786 $1646 Expenses Rent Utilities Groceries Savings Car Expenses Entertainment $300 $60 $130 $120 $150 $20 $600 $120 $200 $350 $150 $120 Net Income $6 $106 a. Tristan is spending too much money on groceries and entertainment. b. Tristan is earning quite a bit more in his full time job. He is spending more on rent, utilities, food, and entertainment, as well as saving $350 each month. c. Tristan is earning double his previous wages. He should double his expenses, as well. d. Tristan's increased income should have no effect on his financial decisions. Please select the best answer from the choices provided

A
A
B
B
C
C
D
D
22
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What is one difference between yearly and monthly budgets?

A
Yearly budgets show a greater degree of planning, so it is appropriate to plan expenses more strictly and in a more detailed fashion in a yearly budget.
B
Monthly budgets should focus on the short term, so it is not appropriate to consider planned but future expenses (such as a vacation) in a monthly budget.
C
Yearly budgets are a better view of your financial goals, so you should work very hard to avoid changing yearly budgets.
D
There is more uncertainty as you plan further ahead, so a yearly budget needs more room to account for unplanned expenses than a monthly budget does.
23

Predict how much money can be saved without having a negative actual net income.Monthly BudgetBudgeted AmountActual AmountIncome Wages$1025$675Expenses Rent Utilities Food Cell Phone Savings $300$100$175$75$300$300$100$200$75$____Net Income$75$____

A
It is not possible to save any money this month without having a negative actual net income.
B
$350 can be saved resulting in an actual net income of $0.
C
$200 can be saved resulting in an actual net income of $75.
D
Because there is a $75 budgeted net income, that $75 can be put towards savings.
24

Jacob is ready to move into his own apartment. He has a great job earning $1680 per month. What is the best way Jacob’s budget can be modified to help him make the $600 monthly rental payment? Monthly BudgetOld BudgetNew BudgetIncome Wages$1680$1680Expenses Rent Food Clothes Savings Recreation Car Expenses$0$200$75$700$400$300$____$____$____$____$____Net Income$5$____

A
Jacob could spend less on food and clothes to make his $600 monthly rental payment.
B
Jacob could spend less on recreation and reduce the amount that he is saving to make his $600 monthly rental payment.
C
No modifications to his budget would be necessary as long as he takes on a part-time job on the weekends to increase his income and help pay his rent.
D
Jacob could spend less on food and recreation to make his $600 monthly rental payment.
25

Lauryn’s wages were not as much as she had budgeted. How can her budget be modified so there will be a positive actual net income?

Question illustration
A
Reduce the college savings expense by $50.
B
Reduce the clothes expense by $75.
C
Reduce the recreation expense by $25.
D
Do all of the above.
26

Tanisha lives with her older sister and helps with the rent by paying $500 per month. Her annual salary as a child care specialist is $14,700 after taxes. Shopping is her favorite pasttime and loves buying new things, but she also wants to save money for her college classes. Select the budget that would best help meet her goals.Table AMonthly BudgetBudget ABudget BBudget CBudget DIncome$1,470$1,225$1,470$1,225Expenses - Rent Food & Personal Items Clothes Savings$500$120$50$700$500$120$150$400$500$120$400$400$500$120$400$150

A
Budget A
B
Budget B
C
Budget C
D
Budget D
27

Analyze the following budget, with an income of $600, to determine how much can be spent on food for the month. Month________Budgeted AmountCell Phone$65Food$___Entertainment$95College Savings$200Car Expenses - Gas, Insurance$160

A
$210 can be spent on food.
B
$145 can be spent on food.
C
$80 can be spent on food.
D
$260 can be spent on food.
28

If $2300 is spent on vacations or travel each year, estimate how much should be set aside each month for those expenses?

A
Approximately $200 per month should be set aside for vacation or travel expenses.
B
Approximately $2300 per month should be set aside for vacation or travel expenses.
C
Approximately $1250 per month should be set aside for vacation or travel expenses.
D
Approximately $230 per month should be set aside for vacation or travel expenses.
29

When preparing a monthly budget, describe how net income is calculated.

A
Net income is calculated by taking the expenses subtotal and subtracting the income subtotal.
B
Net income is calculated by taking the income subtotal and subtracting the expenses subtotal.
C
Subtracting the expenses subtotal from the net income will give you the income subtotal.
D
Adding the expenses subtotal to the net income will give you the income subtotal.

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