Krystal made a budget for her expenses for four weeks in this table.
| Expense | Amount |
|---|---|
| Food | $350 |
| Gas | $120 |
| Rent | $700 |
| Clothes | ? |
Krystal gets paid $750 every two weeks. She wants to save money for next month's rent but she also needs clothes. Does Krystal have enough money left over for clothes and savings for rent?
Yes, she has $330 left over.
Answer (1)
Calculate Krystal's total income: I n co m e = 2 × $750 = $1500 .
Calculate total expenses excluding clothes: E x p e n ses Wi t h o u tCl o t h es = $350 + $120 + $700 = $1170 .
Determine available money: A v ai l ab l e = $1500 − $1170 = $330 .
Calculate money left for clothes after saving for rent: Cl o t h es M o n ey = $330 − $700 = − $370 . Krystal does not have enough money. F a l se
Explanation
Calculate Total Income Let's break down Krystal's financial situation to see if she can afford clothes and save for rent. First, we need to calculate her total income for the four weeks. Since she gets paid $750 every two weeks, her income for four weeks is:
Total Income Calculation I n co m e = 2 × $750 = $1500
Calculate Expenses (Excluding Clothes) Next, we calculate her total expenses for the four weeks, excluding the cost of clothes. These expenses include food, gas, and rent:
Total Expenses Calculation E x p e n ses Wi t h o u tCl o t h es = $350 + $120 + $700 = $1170
Calculate Available Money Now, we determine how much money Krystal has available for clothes and savings by subtracting her expenses from her income:
Available Money Calculation A v ai l ab l e = $1500 − $1170 = $330
Calculate Money for Clothes Krystal wants to save $700 for next month's rent. Let's see how much money she has left for clothes after setting aside her savings:
Money for Clothes Calculation Cl o t h es M o n ey = $330 − $700 = − $370
Conclusion Since the amount Krystal has available for clothes is negative (-$$370), she does not have enough money to save for rent and buy clothes. The initial statement that she has $330 left over is correct in terms of available money after regular expenses, but she doesn't have enough to cover both clothes and rent savings.
Examples
Budgeting is a crucial skill in personal finance. Imagine you're planning a trip and need to allocate funds for transportation, accommodation, and activities. By calculating your total income (or savings) and subtracting your essential expenses, you can determine how much you have left for discretionary spending. This helps you make informed decisions and avoid overspending, ensuring you have enough money for your needs and wants.
