Analyzing Budgets

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• Jake the Peg Loves You

In the video, you saw that Michael used a budget to make sure he pays bills when they’re due. What are some other reasons someone would want to create a budget? Choose all that apply.

• A budget can help people decide what to spend money on and what might be too expensive.

• It can also help in tracking spending. For example, say you spend $100 on dining out one month. The next month you may only spend $50. You can put the extra $50 into your savings account.

• You can buy anything you want!

• You can go to only the best dining experiences!

Alyssa is drafting an email to Stuart, a financial advisor. He said he could help her create a personalized budget. What information will Stuart need to use to set up a personal budget for Alyssa? Select all that apply from the letter.

Stuart,

Hello! It was so great catching up with you at the supermarket! You mentioned that you might be able to help me create a personalized budget. I am currently employed as a director at a day care center on the corner of 1st and Main Street. My birthday is on June 3. My largest expense is my mortgage payment of $1,200 per month. I picked a house in this neighborhood because it is close to work. Last year, my annual salary was $40,030. Please let me know if you can help!

Thank you,

Alyssa Palmer

• I am currently employed as a director at a day care center

• My largest expense is my mortgage payment of $1,200 per month

• picked a house in this neighborhood because it is close to work.

• Last year, my annual salary was $40,030.

Terrance made a list of his expenses (See Picture). He is creating a check-off matrix to organize when his bills are due. A check-off matrix is a table without dollar amounts. You can use a matrix to indicate what time of the year an expense will occur. Help Terrance complete his check-off matrix by choosing when he should mark months in the correct cells of the table according to his list of expenses.

• Mortgage is every month so he should check it off monthly.

• Terrance's car loan is every other month so it should be checked off 6 times per year.

• Food expenses are daily so they should be checked of for every day of the year.

• Gym membership is once per year and should be checked off in July.

• Insurance bill is every three months and should be checked off accordingly.

Maggie wants to create a bar graph to observe her electricity use and cost over the course of a year. Use the information from the table to choose a bar graph that represents this situation.

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Riley wants to purchase a new refrigerator that costs $1,025.99. Use this information to answer the following questions.

If Riley places $50 in an envelope every month, how long will he need to save to be able to afford the new refrigerator?

• 19 months

• 21 months

• 24 months

• 26 months

Riley doesn’t want to wait that long before purchasing the refrigerator, so he decides to consider using credit. After speaking with a store clerk, Riley learns that he qualifies for a special payment plan the store offers. Why should Riley should consider the amount of interest associated with the payment plan?

• Interest decreases the cost of the new refrigerator.

• Interest determines the amount of profit Riley will make from the payment plan.

• Interest determines the amount of taxes Riley will pay when she purchases the refrigerator.

• Interest is the cost for borrowing money.

Riley agreed to a payment plan for the refrigerator. He used a graph to record her payments and the remaining balance. Which two statements are true about the graph?

• Riley made a larger than normal payment in month 11.

• Riley made a larger than normal payment in month 20.

• Riley paid the entire balance after one year and eight months of payments.

• Riley paid the entire balance after two years of payments.

• Riley's average payment amount was $75 each month.

Use this information to organize estimated household expenses by monthly amounts.

rent: $13,800 annually

utilities: $5,400 annually

cell phone: $534 semiannually

internet: $204 semiannually

car loan: $2,274 semiannually

insurance: $720 quarterly

groceries: $4,332 annually

gym membership: $288 annually

entertainment: $420 annually

Which Statements are TRUE based on the expense list?

• This person should designate 1000 dollars per month for his rent.

• $361 should be sat aside for each month for groceries.

• $2880 will be spent in one year on insurance.

• $24 should be sat aside each month for the gym membership.

• $40 should be set aside per month for internet.

Life can be unpredictable at times, and unexpected events can affect your budget. Suppose one month you have to pay an unexpected bill that greatly impacts your budget. What are some actions you could take to keep your budget on track despite the unexpected bill? Choose all that apply.

• Saving every dime you make.

• Reducing spending on discretionary items such as entertainment and clothing.

• Budgeting to create an emergency fund for unexpected bills or expenses.

• Don't have any emergencies or unexpected expenses ever.

• Sell some sea shells down by the sea shore every other weekend.