Antonio is ready to move out of his parent's house and live on his own. He found a great apartment that has all utilities included. His job as an assistant plumber requires him to have a car, but his hours are flexible enough to give him time on the weekends to have fun with his friends. What is the best way Antonio's budget can be modified to help him save enough for the $200 down payment and make the $500 monthly rental payment?

Question

Monthly Budget
Old Budget
New Budget
Income
Wages
$1500
$1500
Expenses
Food
Cell Phone
Savings
Entertainment
Car Expenses
.
$250
$175
$200
$200
$300
.
$____
$____
$____
$____
$____
Net Income
$375
$____

a.
Antonio could keep his budget the same and hope he gets a raise at work.
b.
Antonio could reduce his monthly entertainment expenses by $100 to help pay the monthly rent. He could take $200 out of savings once for the deposit.
c.
Antonio could live at his parent’s house for one more month and save his net income. After one month of living at home, he would have enough additional money for the deposit and one year’s rent at the apartment.
d.
Antonio could reduce his monthly entertainment expenses by $75 and his food expenses by $50 to pay the monthly rent. He could take $200 out of savings once for the deposit.

Answer 1

To effectively evaluate Antonio's options, let's analyze his current situation against the proposed modifications to his budget to ensure he can cover the $200 down payment and the $500 monthly rent.

Current Budget Analysis

Monthly Income:

• Wages: $1500

Current Expenses:

• Food: $250
• Cell Phone: $175
• Savings: $200
• Entertainment: $200
• Car Expenses: $300
• Total Expenses: $1,125

Net Income:

• $1,500 (income) - $1,125 (expenses) = $375

Required Expenses

• Down Payment: $200 (one-time)
• Monthly Rent: $500

Evaluating the Options

a. Keep the budget the same and hope for a raise.

• This option does not provide a clear path to meeting his immediate needs for the down payment and rent. It relies solely on hope without action, which is not advisable.

b. Reduce monthly entertainment expenses by $100 and take $200 from savings for the deposit.

• New Entertainment Expense: $100
• Total Monthly Expenses After Adjustment:
  • Food: $250
  • Cell Phone: $175
  • Savings: $200
  • Entertainment: $100
  • Car Expenses: $300
• Total = $1,025
• New Net Income:
  • $1,500 - $1,025 = $475
• After Taking $200 for the Down Payment:
  • He would still have $275 leftover for the month.
  • He can cover the $500 rent.

This option works.

c. Live at parent's house for one more month.

• This option allows him to save his net income ($375) for a month but does not allow him to make the rent payment immediately. He could save a total of $750 in two months, which would cover both the down payment and rent.

This option is also viable but delays his independence.

d. Reduce monthly entertainment expenses by $75 and food expenses by $50 and take $200 from savings.

• New Budget:
  • Food: $200
  • Cell Phone: $175
  • Savings: $200
  • Entertainment: $125
  • Car Expenses: $300
• Total Monthly Expenses: $1,000
• New Net Income:
  • $1,500 - $1,000 = $500
• After Taking $200 for the Down Payment:
  • He would have $300 leftover.
  • He can cover the $500 rent.

This option works as well.

Conclusion

Best Option: Both options b and d allow Antonio to successfully cover his first month's rent and the down payment while still having a residual balance. Option c also works but does not allow for immediate move-out.

Final Recommendation: Option b or d would be the best approaches for immediate budget adjustment while still maintaining a reasonable standard of living for Antonio.