Final answer:
To create a monthly cash flow budget that shows income and expenses, list all income sources and expenses. For Mary Ann's expenses, calculate the total monthly expenses and compare it to 10% of her after-tax income.
Step-by-step explanation:
To create a monthly cash flow budget that shows your income and car payments, you need to list all your income sources and expenses. For Mary Ann, her after-tax monthly income is $2,589.10. Her monthly expenses include rent ($790), cell phone ($75), utilities ($45), cable TV and internet ($65), groceries ($450), entertainment ($250), car payment ($350), and gasoline ($120). To determine if she can save 10% of her after-tax income, we need to calculate her total monthly expenses and 10% of her after-tax income, and then compare the two.
Total monthly expenses: $790 + $75 + $45 + $65 + $450 + $250 + $350 + $120 = $2,135
10% of after-tax monthly income: 10% of $2,589.10 = $258.91
Since Mary Ann's monthly expenses ($2,135) are higher than 10% of her after-tax income ($258.91), she would not be able to save 10% of her after-tax income.