Question

Hannah Garcia's monthly take-home pay is $2,255. Examine her monthly budget, and determine if she is in credit overload. Show your work or explain how you got your answer.
rent: 975
utilities: 250
car payment: 275
credit card #1: 76
credit card #2: 114
savings: 200
miscellaneous: 350

Answer 1

Add up Hannah's monthly outgoes and compare to her take-home pay.

Expenses:
- Rent: 975
- Utilities: 250
- Car payment: 275
- Credit card #1: 76
- Credit card #2: 114
- Savings: 200
- Miscellaneous: 350
Total = 975 + 250 + 275 + 76 + 114 + 200 + 350 = 2,240

Take-home pay = 2,255
Leftover = 2,255 − 2,240 = 15

Conclusion:
- She is not technically over budget (expenses are $15 less than income), so she is not in an overdraft right now.
- However, the margin is extremely slim ($15/month), so her budget is precarious — any unexpected cost would push her into deficit.
- Her monthly debt payments (car + both credit cards = 275 + 76 + 114 = 465) are about 20.6% of her take-home pay (465 ÷ 2,255 ≈ 0.206). That is fairly high and leaves little flexibility.

Recommendation: Trim misc or other discretionary spending, increase savings gradually only after building a small buffer, or focus extra payments on reducing credit-card debt to create more breathing room.