Ted is a single guy who’s living the good life. The spreadsheet below shows Ted’s cash flow for a month. Based on his monthly cash flow, explain what part of Ted’s financial plan might be missing and why.

Answer:

Ted’s plan is missing savings. Because all $5,225 of his monthly income is spent, he has no money set aside for emergencies, retirement, or future goals. An unexpected expense could therefore cause financial problems or require him to borrow money.