Make a budget for the two families described below. Then, analyze the differences. Create a Venn diagram

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Question:

Make a budget for the two families described below. Then, analyze the differences. Create a Venn diagram that shows the similarities and differences. Create a tip sheet to help each family improve their budget to allow them to reach their goals.

Family #1: Mary and Joe got married after high school. They now have two children, ages 2 and 6. The oldest child is in public school. Mary works part-time at a child care center. She works 20 hours a week for $8.00 per hour and receives free care for her youngest child while she is working. Since she is a part-time employee, she receives no other benefits. Deductions from her paycheck are income tax and Social Security, which consume about 15% of her check. She receives a check twice a month. Joe is a construction worker. He earns $12.00 per hour and works full time. He often gets 10 to 15 hours overtime hours per week and is paid weekly. Joe has paid health insurance provided by the company but must pay $250 per month for dependent coverage for his wife and children. Joe also pays income tax and Social Security, which are about 15% of his gross income. Joe and Mary have a truck and a car that are paid for. Mary's job is very close to their apartment as is the school their oldest child attends. Joe often has to travel to various job sites around the city. Joe and Mary live in a two-bedroom apartment that rents for $1,000 a month. Their utilities, which include water, electricity, gas and cable TV, cost about $500 each month. Currently, they have about $2,500 in a savings account. They have several credit cards that they pay the minimum payment each month. Gasoline card = $100/month, MasterCard = $50/month, JC Penney = $50/month and Target = $50/month. Their two goals are:

(1) Take a family vacation to DisneyWorld and

(2) buy a house.

Calculate the monthly income, set up a budget to allow funds to be spent on food, clothing, entertainment, savings, etc. What should they do to reach their goals?

Family #2: Eric and Sarah married after completing college. Both are full-time teachers. Their six-year-old child attends the same school that Sarah teaches at. The two-year-old attends a day care center. Sarah earns $3,500 per month. Her benefits include free health insurance and about 20% of her monthly check going for income tax and retirement benefits. Eric makes $4,000 per month. His benefits include free health insurance, with about 20% of his monthly check going toward income tax and retirement benefits. Eric also pays $250 a month for health insurance for the children. They travel about 20 minutes each morning to reach Eric's school and then Sarah drives about 5 miles more to reach her school. The day care center the youngest child is in is very close to Sarah's school. After school is out, Sarah picks up the youngest child and then drives to Eric's school to pick him up. Eric wants to return to the university to pursue a law degree. This summer, Eric and Sarah want to take the children to DisneyWorld in Florida. They also want to buy a second car and pay off their college loans. They are buying a house and their house payment is $1,200 per month. Utilities average about $600 per month. They pay about $350/month for their student loans and the car payment they pay now is $350 a month and they owe 12 more payments. They have about $2,500 in savings. Their monthly credit card payments are:

Gasoline - $100;

MasterCard - $75;

JC Penney - $50;

Sears - $50;

Dillards - $75 and

Target - $75.

Calculate the income they make minus the deductions. Set up a budget to allow for them to meet their financial obligations; pay for food, clothing and entertainment; and put money into their savings account. What can you suggest for this family so that they can reach their goals?