Budget Rationale
The budget discussed in this paper outlines a monthly expenditure of Chris, a twenty-seven-year-old man. Chris was recently involved in a plane crash just outside JF Kennedy Airport while taking off. The accident changed the life of Chris completely as he sustained multiple injuries, including spinal injuries that paralyzed his lower body from the back down to the legs. Chris has since then been unable to work and lives on social security Disability (SSD) and food stamps. SSD is an insurance program that, in the event you shall encounter a disabling accident such as a car accident, the insurance gives you premium coverage.
Chris receives a monthly Social security pay of two thousand, two hundred and fifty US dollars, and an additional one thousand and three hundred dollars in food stamps. The outline on the attached spreadsheet shows my opinion of how Chris should spend his monthly income and get at least eight percent disposable income..
Don't use plagiarised sources.Get your custom essay just from $11/page
| Monthly Take Home Income | Secured Debts (Monthly Payments) | ||||||
| Salary/Wages/Business Draw | 0 | Rent | 200 | ||||
| Salary or Wages (Spouse) | 1st Mortgage | 100 | |||||
| Social Security | 2250 | 2nd mortgage | |||||
| Pension/Retirement | 0 | Land Lease (Trailer park, other) | |||||
| Interest on Accounts | Student Loans | 0 | |||||
| Alimony / Child Support | 0 | Auto Loans/Leases | 0 | ||||
| Real Estate rent (income) | 0 | Recreation (Boat, ATV, etc.) | |||||
| Investment Dividends | 0 | Past Due Taxes | 0 | ||||
| Unemployment/ Food Stamps | 1300 | Other Debts | |||||
| Other | 0 | Other Debts | |||||
| Total Take Home Income | $3,550 | Other Loans | |||||
| Other Loans | |||||||
| Monthly Living Expenses | Total Secured Debt | $300 | |||||
| Alimony / Child Support (outgoing) | 0 | ||||||
| AutoGas and Repair | 10 | Unsecured Debt | |||||
| Auto Insurance | 135 | Credit Card 1 | 500 | ||||
| Cable TV/ Satellite Fees | 10 | Credit Card 2 | 400 | ||||
| Charitable Contributions | 0 | Credit Card 3 | 0 | ||||
| Child Care | 0 | Credit Card 4 | 0 | ||||
| Children’s’ Activities | 0 | Credit Card 5 | 0 | ||||
| Clothing Maintenance (Laundy/Dry cleaning | 10 | Credit Card 6 | 0 | ||||
| Clothing Purchases | 40 | Credit Card 7 | |||||
| Electric Bill | 20 | Credit Card 8 | |||||
| Food (In-home / Groceries) | 200 | Personal Loan 1 | 0 | ||||
| Food (Out of home – Lunch, Dining) | 90 | Personal Loan 2 | 0 | ||||
| Gas and Oil Bill | 500 | Medical Bill Payment | 100 | ||||
| Health and Dental Insurance | 180 | Other | |||||
| Homeowner/Condo fees | Other | ||||||
| Homeowners/ Renters Insurance | 40 | Total Unsecured Debt | $1,000 | ||||
| Household items | 0 | ||||||
| Internet Access (AOL, MSN, DSL) | 100 | Summary | |||||
| Life and Disability Insurance | 100 | Total Take Home (Income) | $3,550 | ||||
| Memberships (Health club etc.) | 0 | Total Living Expenses (-) | $1,965 | ||||
| Personal Care (Grooming) | 90 | Total Secured Debt Payments (-) | $300 | ||||
| Prescriptions | 100 | Total Unsecured Debt Payments (-) | $1,000 | ||||
| Property Services (Gardener, Pool) | 0 | Disposable Income ** | $285.00 | ||||
| Security Services (Alarm) | 20 | Disposable Income as Percent | 8.03% | ||||
| Subscriptions | 30 | A healthy budget will have 5-10% disposable income. | |||||
| Telephone (Home, Cell, Pager) | 0 | If your calculations reveal a deficit (in parentheses) | |||||
| Trash Disposal | 20 | You may be in serious debt. We can help. | |||||
| Tuition and School Supplies | 60 | ||||||
| Water Bill | 10 | ||||||
| Other Expenses | 0 | ||||||
| Other Expenses | 200 | ||||||
| Other Expenses | |||||||
| Total Monthly Living Expenses | $1,965 | ||||||
(John 2019)
In conclusion, Chris’s total income equals three thousand five hundred and fifty US dollars, which is solely from the SSD program and food stamps. Chris has not invested in any income-generating projects that could earn him extra income. Out of the total revenue, more than half (55%) is spent on his total monthly expenses totaling to 1965. His secured debts, rent, and his first mortgage cost him three hundred dollars, which is 8.5% of his income. A thousand dollars is stashed in his credit cards. Using the budget plan above, Chris gets a total of two hundred and eighty-five dollars as disposable income, which is 8.03% of his income.
Reference
John, W. 2019 20 Average Monthly Expenses to Include in Your Budgetretrieved on 23 February 2020, from https://www.quicken.com/blog/monthly-expenses