Question

19. John just graduated college with a degree in business. He has gotten a job with the new construction company in town selling products for them. He will be making $45,000 per year. John wants a new car, so he isexcited about looking for one. He also hopes to have a family one day and buy a house

instead of rent an apartment with his
roommate.Which is the first step John should take to meet his goals of buying a car and house?

A. He should start by renting his own
apartment without a roommate.

B. He should create a budget and start saving for a new car and house.

C. He should apply for a loan to see how much he can afford for a house or car.

D. He should go look for a car first because
that would be a smaller investment.

Answer 1

Answer: B. He should create a budget and start saving for a new car and house.

Explanation: In other to make his goals of buying a car and a house attainable, the first step John should take is to create a budget and start saving towards his goals. Once John has gotten a job that pays a known monthly, he can then draft a budget of how he intends to spend his monthly earning on his regular needs and how much he will set aside as saving towards his goal of buying a car and a house. This will enable him keep track of his spending while also ensuring that he keeps a portion of his earning.