Adjusting a budget - Given the net income, the percent budgeted for two variable expenses, and the amount of an unexpected bill, determine if there is enough money in the variable expense items to cover the amount of the unexpected expense or if the bill should be covered with savings.
Net income: $535.25
Percent item 1: 20%
Percent item 2: 17%
Bill due: $96.31
Amount in savings: $150
EXAMPLE :
Adjusting a Budget
At certain times you may want to make changes to a budget. If you get a pay raise, for example, you may want to get a more expensive car or house. On the other hand, you could find out that you don’t have enough money for some things that you need, so you must adjust your budget accordingly. Let’s look at some sample problems to see if this man has budgeted correctly.
Example 2. Arnold Herlenmeyer
Net income: $950.00
Budgeted percentage for item 1: 5%
Budgeted percentage for item 2: 7%
Combined Payment due on these items: $206.45
According to Arnold’s budget does he have enough to pay for the items?
First we multiply the percentage for item 1 by Arnold’s net income -
$950
× .05
$47.50
Next we multiply the percentage for item 2 by Arnold’s net income
$950.00
× .07
$ 66.50
Now we add those two figures together to see how much Arnold has budgeted:
$ 47.50
+$66.50
$114.00
So Arnold has only budgeted $114 dollars and the items cost $206.45. He doesn’t have enough! He needs to either make an adjustment to his budget or not purchase the items. Let’s look at another example.
Oops I Forgot The Options
a)Variable expense adjustment
b)Enough in net income
c)Withdrawal from savings
0.37*535.25 = $198.04.
This is more than enouh to cover the unexpected bill.