Question

Alexa has finished her culinary training program and is now working full-time as a chef in a hotel resort restaurant. She has tripled her salary from when she was working part-time to pay her expenses through school. How should this increased income affect her budget? Make comparisons with her previous budget and her current budget."

a. Alexa is earning quite a bit more money and her expenses reflect the change in income.
b. Alexa is earning quite a bit more money than she was previously. She has worked hard and deserves to spend a lot of money on herself.
c. Alexa is earning quite a bit more money than she was previously. This would be a good time for her to re-evaluate her budget. Part of the extra money she is making could be put in her savings account.
d. Her increased income should have no effect on her financial decisions.

Answer 1

With an increase in income after becoming a full-time chef, Alexa should reevaluate her budget to allocate funds efficiently for needs, savings, and discretionary spending, while aiming for a balance between enjoying her income and planning for financial security.

Step-by-step explanation:

Alexa's increase in income from her job as a chef should result in a reassessment of her budget. Previously, her part-time salary would have limited her spending in various categories. Now that she has tripled her salary, she should establish a new budget that accounts for her higher income. This reassessment involves addressing her needs, such as living expenses and savings, but also considering changes in discretionary spending, which might include personal treats, vacations, or hobbies.

However, it is important to avoid overspending just because there's more income available. Alexa should also consider increasing her savings contributions and investing in her financial future. Establishing a solid emergency fund, contributing to a retirement account, and setting financial goals can ensure that her increased income is put to good use while still allowing for some enjoyment of the fruits of her hard work.