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Budget Rationale

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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..

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Monthly Take Home IncomeSecured Debts (Monthly Payments)
Salary/Wages/Business Draw0Rent200
Salary or Wages (Spouse)1st Mortgage100
Social Security22502nd mortgage
Pension/Retirement0Land Lease (Trailer park, other)
Interest on AccountsStudent Loans0
Alimony / Child Support0Auto Loans/Leases0
Real Estate rent (income)0Recreation (Boat, ATV, etc.)
Investment Dividends0Past Due Taxes0
Unemployment/ Food Stamps1300Other Debts
Other0Other Debts
Total Take Home Income$3,550Other Loans
Other Loans
Monthly Living ExpensesTotal Secured Debt$300
Alimony / Child Support (outgoing)0
AutoGas and Repair10Unsecured Debt
Auto Insurance135Credit Card 1500
Cable TV/ Satellite Fees10Credit Card 2400
Charitable Contributions0Credit Card 30
Child Care0Credit Card 40
Children’s’ Activities0Credit Card 50
Clothing Maintenance (Laundy/Dry cleaning10Credit Card 60
Clothing Purchases40Credit Card 7
Electric Bill20Credit Card 8
Food (In-home / Groceries)200Personal Loan 10
Food (Out of home – Lunch, Dining)90Personal Loan 20
Gas and Oil Bill500Medical Bill Payment100
Health and Dental Insurance180Other
Homeowner/Condo feesOther
Homeowners/ Renters Insurance40Total Unsecured Debt$1,000
Household items0
Internet Access (AOL, MSN, DSL)100Summary
Life and Disability Insurance100Total Take Home (Income)$3,550
Memberships (Health club etc.)0Total Living Expenses (-)$1,965
Personal Care (Grooming)90Total Secured Debt Payments (-)$300
Prescriptions100Total Unsecured Debt Payments (-)$1,000
Property Services (Gardener, Pool)0Disposable Income **$285.00
Security Services (Alarm)20Disposable Income as Percent8.03%
Subscriptions30A healthy budget will have 5-10% disposable income.
Telephone (Home, Cell, Pager)0If your calculations reveal a deficit (in parentheses)
Trash Disposal20You may be in serious debt. We can help.
Tuition and School Supplies60
Water Bill10
Other Expenses0
Other Expenses200
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

 

 

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