Predict how much money can be saved without having a negative actual net income.

Question

Monthly Budget
Budgeted Amount
Actual Amount
Income
Wages

$1025

$675
Expenses
Rent
Utilities
Food
Cell Phone
Savings

$300
$100
$175
$75
$300

$300
$100
$200
$75
$____
Net Income
$75
$____
a.
It is not possible to save any money this month without having a negative actual net income.
b.
$350 can be saved resulting in an actual net income of $0.
c.
$200 can be saved resulting in an actual net income of $75.
d.
Because there is a $75 budgeted net income, that $75 can be put towards savings.

Answer 1

To determine how much money can be saved without having a negative actual net income, we need to calculate the actual net income and see how savings affect it.

1. Calculate Actual Income:

   • Actual Income from Wages: $675

2. Calculate Actual Expenses:

   • Rent: $300
   • Utilities: $100
   • Food: $200 (you noted this should be $200 instead of $175 in the actual amounts)
   • Cell Phone: $75
   • Total Actual Expenses = Rent + Utilities + Food + Cell Phone
   • Total Actual Expenses = $300 + $100 + $200 + $75 = $675

3. Calculate Actual Net Income:

   • Actual Net Income = Actual Income - Total Actual Expenses
   • Actual Net Income = $675 - $675 = $0

Now, let's analyze the savings options:

• Budgeted Savings: $300, but we need to see how much can be saved while ensuring the actual net income does not go negative.

Since the current actual net income is $0, the maximum amount that can be saved without resulting in a negative net income is also $0. This means:

1. If you choose to save any money, it will affect your net income. For example:
   • If you save $250, your net income would be $0 - $250 = -$250 (which is negative).
   • If you save $100, your net income would be $0 - $100 = -$100 (which is negative).
   • If you save $0, your net income remains $0.

Given these calculations, the correct answer is: a. It is not possible to save any money this month without having a negative actual net income.