Question

Brenda earns $1,700 per month after taxes. She is working on her budget and has the first three categories finished.

Housing $612
Food $238
Transportation $370

What is the problem with this budget?


Select the best answer from the choices provided.



She is budgeting too much for transportation.



She has used the highest recommended percentages for the three categories.



She has allotted more than 36% of her income for housing.



She is budgeting too little for transportation.

Answer 1

The problem with Brenda's budget is that she has allotted more than the recommended maximum of 30% of her income for housing, which is approximately 36%, potentially leading to financial strain.

Step-by-step explanation:

Brenda earns $1,700 per month after taxes and has budgeted $612 for housing, $238 for food, and $370 for transportation. To determine what the problem with this budget is, we must first calculate the percentage of income allocated to each category. For housing, Brenda is spending approximately 36% of her income (612/1700*100). Typically, the recommended maximum percentage of income for housing is 30%. Thus, it seems Brenda has allotted more than the recommended percentage for housing. This could lead to financial strain in other areas of her life or leave her with less money to save or spend on other necessities or desires.

Answer 2

Brenda earns $1,700 per month after taxes. She is working on her budget and has the first three categories finished.Housing $612
Food $238
Transportation $370
What is the problem with this budget?
The answer is => She has allotted more than 36% of her income for housing