Question

Suppose you have a job that brings in $1,150 a month after taxes. You contribute $350 towards rent and utilities each month for an apartment you share with two other people. You put $100 each month into a savings account, and you spend about $50 per month for a cell phone. Of course, you also eat, wear clothes, and go out with friends. You want to buy a car that will cost $300 per month for payments and insurance. Can you afford it? Plan a budget to see if you can take on this new fixed expense.

Answer 1

Budget:
income $1150 per month after tax

expenditure
-$350 rent
-$100 saving
-$50 cell phone
-$300 car n insurance
=$800 per month
plus $ for food, clothes and go out with friends

so if u spend less than 1150-800=$350 per month in food, clothes and go out with friends, then u can afford the car payment.

Answer 2

monthly expense = 350+100+50+300 = $800 + eat, clothes and go out

monthly revenue = $1150

difference = 1150-800-eat, clothes and go out = $350 - eat, clothes and go out

so you can afford the car if total of eat, clothes and go out is less than or equal to $350