The Jones family income is $42,000 a year (net pay), which is $3,500 a month.
They have created the following monthly family budget:
Housing........$600
Utilities..........$458
Food...$700
Transportation...$114
Insurance...$266
Personal care products...$50
Medical...140$
Clothing...$500
Reading and education...$60
Entertainment...$436
Miscellaneous...$76
Total Budget Expense...$3,500
As you can see, this is a total consumption budget.
Mr. Jones knows you have been taking a personal finance class. He wants you to examine the family budget to see how it compares to the typical American family budget. He also wants you to determine how the budget can be changed to free up money for a savings account and retirement fund.
This budget represents the monthly consumption of goods and services for a typical American family.
Typical American Family Budget:
Housing...28%
Food...16%
Transportation...16%
Utilities...7%
Entertainment...6%
Healthcare...5%
Clothing...4%
Miscellaneous...2%
Personal care products...1%
Reading and education...1%
Insurance...1%
Examine the Jones family budget and compare it to the typical American family budget.
• Determine all of the percentages of each category in the Jones family budget.
• Identify the categories from the Jones family budget that are higher than the categories of the typical American family budget.
• Identify the categories from the Jones family budget that are the same or lower than the categories of the typical American family budget.
• Write a paragraph that offers at least five suggestions to Mr. Jones as to how he can readjust his budget to free up money for savings and retirement.
