Question

Grace has a net spendable income of $1,700 per month. She decides to check her expenses for the previous month and adjust her budget. Expenses Housing $510 Food $204 Transportation $255 Insurance $51 Debts $0 Entertainment $85 Clothing $85 Savings $85 Medical $0 Miscellaneous $85 Grace then adjusts her budget for her main expense categories. Old Budget New Budget Housing $510 Housing $510 Food $204 Food $254 Transportation $295 Transportation $295 Insurance $51 Insurance $51 Debts $25 Debts $0 Entertainment $85 Entertainment $100 Clothing $85 Clothing $100 Savings $85 Savings $100 Medical $85 Medical $0 Miscellaneous $85 Miscellaneous $100 Evaluate Grace's new budget.

Answer 1

She is going over budget. She is putting less than the recommended percentage of her income into the savings category. She is putting the minimum recommended percentage of her income into all categories except debt. She is putting less than the recommended percentage of her income into the clothing, medical, and miscellaneous categories.

Answer 2

Grace is new budget is going almost equal to total income and according to the old budget she spend less amount and save more. So she need to stick with old budget.

What is the Budget?

A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money.

Total Income :  $ 1700

Old budget Expenses:

Housing : $ 510

Food : $ 204

Transportation : $255

Insurance : $ 51

Debts : $ 0

Entertainment : $ 85

Clothing : $ 85

savings : $ 85

Medical : $ 0

Miscellaneous : $ 85

Total Expenses in Old budget : $ 1360

New budget Expenses:

Housing : $ 510

Food : $ 254

Transportation : $295

Insurance : $ 51

Debts : $ 25

Entertainment : $ 100

Clothing : $ 100

Savings : $ 100

Medical : $ 85

Miscellaneous : $ 100

Total Expenses in New budget : $ 1620

Thus, Old budget is better than the new budget prepared by the Grace.

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