Section 1

Explore

 

In Discover, you shared your answers with other students. It was likely that different students used different categories to group Josephine’s November expenses. Categories are often a matter of personal choice and can depend on the personal circumstances of the person who is drafting a budget. Even the number of categories may differ.

 

Try This 2

 

Open Josephine's November Expenses activity by clicking on the button to the left. Then, do the following:

• Under the Category heading, type in the categories you chose to use in Try This 1.
  
  
• If you require an additional line for more categories, click “Add a new category.”
  
  
• Categorize each of Josephine’s expenses by selecting the appropriate category from the drop-down menu beside each expense.
  
  
• When you put a particular expense into a category, the total for the category is updated and the percentage of that total as compared to Josephine’s net income is also updated.
  
  
• One category you cannot delete or add an expense into is Savings. Remember that Josephine’s expenses were $65.13 less than her net or net pay.
  
  

1. What is the sum of the percentages for all the budget categories and savings? Why?
   
   
2. Should Josephine create a budget based on November spending alone? Why or why not?
   
   
3. Some financial advisors suggest an individual should not spend more than 35% of net pay on rent or house payments. According to your table, is Josephine within this guideline?
   
   
4. What was the cost of snow tires as a percentage of her net pay? Round to one decimal place.

Save your answers to your course folder.