James has prepared his income statement:

Question

Income
Salary 3,500
Tax withholding (490)
401(k) 0
Health insurance (210)
Net salary 2,800
Total net income $2,800.00

Expenses
Rent (900)
Utilities (325)
Internet (62)
Credit card payments (200)
Food (625)
Clothes (200)
Transportation (200)
Entertainment (400)
Total expenses $2,912.00
Difference ($112.00)
How can James free up more money to pay down his credit card debt?

(1 point)
Responses

He has to complete an income statements every month.
He has to complete an income statements every month.

He has to pay less in rent each month.
He has to pay less in rent each month.

He has to cut back on other expenses.
He has to cut back on other expenses.

He has to start contributing to his 401(k).
He has to start contributing to his 401(k).
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Answer 1

To free up more money to pay down his credit card debt, the best option for James would be:

He has to cut back on other expenses.

While reducing rent could help, it's often not feasible to lower a fixed cost like rent without significant changes, like moving. Contributing to his 401(k) would reduce his take-home pay, which would not help his immediate goal of paying down debt. Therefore, identifying and cutting back on discretionary expenses like entertainment, dining out, or clothing would be the most effective strategy for freeing up more funds.