Budget Busters: Who’s breaking the Bank?
Where does all your money go? No matter how much money you earn, a careful budget lets you know exactly what happens to your cash.
Below are three different cash flow scenarios, each spanning one month. Analyze each person’s budget and spending in the scenarios below, and write down answers to the following questions in your notebook:
- Why are they not on track to meet their goal?
- What could they do differently to get where they want to be?
Nate is a junior in high school. He works 15 hours a week at the mall, and his net income after taxes is $600 a month. He lives with his parents, so he doesn’t have rent, utility or food expenses. His older brother owns a car and lets him borrow it to drive to work for $50 each month; otherwise Nate takes the bus. He really wants to buy a car, so he puts any leftover money toward savings. Nate also pays for his cell phone and personal expenses, such as going to the movies, buying video games and purchasing gifts.
Below is Nate’s estimated budget and what he actually spent in one month’s time.
Net Income: $600/month
Maria just graduated from college and accepted her first job as a social media manager for a real estate company. She can’t believe that her monthly net income will be $3,000. She just moved into a one-bedroom apartment, so she is responsible for rent, utilities, food and other household expenses. She is paying off a student loan and she wants to save as much money as she can to buy a house someday. She owns a car and enjoys going out with friends on the weekend.
Below is Maria’s estimated budget and what she actually spent in one month’s time.
Net Income: $3,000/month
Jamal is a senior in high school and works part time at a neighbourhood coffee shop. Their monthly net income after taxes is $1,500 and they are saving up for college. They own a car and make payments toward it each month, but live with their parents so they save on rent, utilities and food costs. They occasionally go out with friends or go shopping, but they try to hold back on these things so they can save more for college next year.
Below is Jamal’s estimated budget and what they actually spent in one month’s time.
Net Income: $1,500/month