Question

Use Peter's Budget Worksheet to respond to the statement that follows.

PETERS BUDGET WORKSHEET
CATEGORY BUDGET AMT

Wages and bonuses (after-tax) $2,190
TOTAL INCOME $2,190
Rent $525
gas/electric $150
cable/internet $150
car payment $345
car insurance $115
cell phone $130
gas for car $165
entertainment(dinners, $325
movies, etc.)
water $10
groceries $200
savings $150
TOTAL EXPENSES $2,265
SURPLUS -$75
Peter is currently spending more each month than he is earning. Explain, using complete sentences, three steps Peter could take to lower his expenses each month.

Answer 1

First, Peter could lower his entertainment by not watching as many movies. Second he could decline his cell phone usage by not using it as much. And third he could lower his cable/internet usage by not using it as much. These are ways Peter can lower his expenses each month.

Answer 2

Some possible options are:

• move to another place, so that he spends less money on rent

• change his cable/internet package

• change his cell phone package

• use public transport, to avoid spending money in his car

• avoid savings

• less entertainment