Question

ames has prepared his income statement:%0D%0A%0D%0AIncome%09 %09 %09 %0D%0ASalary%09 %093,500%09 %0D%0ATax withholding%09(490)%09 %09 %0D%0A401(k)%090%09 %09 %0D%0AHealth insurance%09(210)%09 %09 %0D%0ANet salary%09 %092,800%09 %0D%0ATotal net income%09 %09 %09$2,800.00%0D%0A %09 %09 %09 %0D%0AExpenses%09 %09 %09 %0D%0ARent%09(900)%09 %09 %0D%0AUtilities%09(325)%09 %09 %0D%0AInternet%09(62)%09 %09 %0D%0ACredit card payments%09(200)%09 %09 %0D%0AFood%09(625)%09 %09 %0D%0AClothes%09(200)%09 %09 %0D%0ATransportation%09(200)%09 %09 %0D%0AEntertainment%09(400)%09 %09 %0D%0ATotal expenses %09 %09 %09$2,912.00%0D%0ADifference%09 %09 %09($112.00)%0D%0AHow can James free up more money to pay down his credit card debt?%0D%0A%0D%0A(1 point)%0D%0AResponses%0D%0A%0D%0AHe has to complete an income statements every month.%0D%0AHe has to complete an income statements every month.%0D%0A%0D%0AHe has to pay less in rent each month.%0D%0AHe has to pay less in rent each month.%0D%0A%0D%0AHe has to start contributing to his 401(k).%0D%0AHe has to start contributing to his 401(k).%0D%0A%0D%0AHe has to cut back on other expenses.

Answer 1

To free up more money to pay down his credit card debt, James should consider cutting back on other expenses.

Here's a breakdown of the options:

1. Complete income statements every month: This is important for tracking finances but won't directly free up money.
2. Pay less in rent: While lowering rent can help, it may not be feasible immediately without moving.
3. Start contributing to his 401(k): This would decrease his net income even more, not help him pay off debt.
4. Cut back on other expenses: This is the most effective way to free up additional funds. By reviewing non-essential expenses (like entertainment or food), James can find areas to reduce spending.

Thus, the best response for James is to cut back on other expenses.