Question

You have helped Marie establish financial goals and prepare a plan for achieving them. A tentative plan requires that Marie save $2,000 annually over the next five years. Since Marie has saved very little until now, she is concerned that this amount may be excessive.
She has asked your help in preparing a budget for the upcoming year.
Marie expects to earn $32,000 next year in salary and $6,000 in support payments from Jake’s father. Other income is minimal and can be disregarded. Her monthly rent is $400 and she estimates a gas and electric bill of $150 a month. Payroll taxes have been about 10 percent of her gross salary and her employer withholds $200 a month for health insurance. Last year, she paid babysitters $4,800 and she paid $1,200 on her student loans.
Her telephone bill is $20 a month and she pays another $18 a month for Internet service.
While she hasn’t kept good records, Marie estimates she spends about $400 a month on auto expenses (not counting auto and property insurance of $1,500 a year) and about $6,000 annually on food, both at home and dining out.
Marie realizes that the previous list is not inclusive, and she expects that you can help her identify possible outlays related to other areas. Explain to Marie why you believe these areas are important. However, do not consider any expenses related to Marie’s intent to begin law school. Marie feels this goal is very important but first she must determine if it about 10 percent of her gross salary and her employer withholds $200 a month for health insurance. Last year, she paid babysitters $4,800 and she paid $1,200 on her student loans.
Her telephone bill is $20 a month and she pays another $18 a month for Internet service. While she hasn’t kept good records, Marie estimates she spends about $400 a month on auto expenses (not counting auto and property insurance of $1,500 a year) and about $6,000 annually on food, both at home and dining out.
Marie realizes that the previous list is not inclusive, and she expects that you can help her identify possible outlays related to other areas. Explain to Marie why you believe these areas are important. However, do not consider any expenses related to Marie’s intent to begin law school. Marie feels this goal is very important but first she must determine if it can be accommodated within her budget. Use Form 3.1 to help her prepare an annual budget. Try to be as realistic as possible in setting expense items. After finishing the budget, prepare a report on Marie’s financial situation. Discuss whether she will have adequate financial resources to pursue the goals identified in Chapter.
Form 3.1 Budget (Part A)
Form 3.1 Budget(Part B)


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  • CreatedMarch 19, 2015
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