Julia brings home $1600 per month after taxes. Her rent is $350 per month, her utilities are $100 per month, and her car payment is $250 per month. Julia is currently paying $200 per month to her orthodontist for maintenance of her braces.
a. If Julia’s groceries cost $50 per week and she estimates her other expenses to be $150 per month, how much will she have left each month to put toward savings to reach her financial goals?
b. Julia is considering trading in her car for a new one. Her new car payment will be $325 per month, and her insurance cost will increase by $60 per month. Julia determines that her other car-related expenses (gas, oil) will stay about the same. What is the opportu- nity cost if Julia purchases the new car?