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Alejandro lives in a small apartment, within walking distance to school. He takes the bus to work where he makes $10 per hour after taxes and works 30 hours per week. He wants to save money to buy a $6000 car within the next 2 years. How could a monthly budget be created to help Alejandro meet his financial goals? Select the best option.

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Final answer:

To help Alejandro meet his financial goals, he should create a monthly budget by considering his income and expenses. He can save $250 per month to buy a $6000 car within the next 2 years. His remaining monthly income can be allocated to his expenses.

Step-by-step explanation:

To create a monthly budget to help Alejandro meet his financial goals, we need to consider his income and expenses. Alejandro's income from work is $10 per hour after taxes, and he works 30 hours per week. This means his weekly income is $300 ($10 x 30). To calculate his monthly income, we multiply his weekly income by the number of weeks in a month, which is usually around 4 (weeks). So, Alejandro's monthly income is $1200 ($300 x 4).

Next, we need to determine how much money Alejandro can save each month. Since he wants to save to buy a $6000 car within the next 2 years, we divide $6000 by 24 (months) to find out how much he needs to save each month. Alejandro needs to save $250 ($6000 ÷ 24) every month.

In order to create his monthly budget, Alejandro should deduct his monthly savings goal from his monthly income. So, his budget would look like this:

  • Monthly Income: $1200
  • Monthly Savings: $250
  • Remaining Monthly Income: $950 ($1200 - $250)

Alejandro can then allocate the remaining monthly income to his expenses and adjust accordingly to match his financial goals.

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