To determine if Hannah Garcia is in credit overload, we need to calculate her total monthly expenses and then compare that to her monthly take-home pay of $2,255.
Here's the breakdown of her monthly budget:
- Rent: $975
- Utilities: $250
- Car payment: $275
- Credit card #1: $76
- Credit card #2: $114
- Savings: $200
- Miscellaneous: $350
Now, let's add up all her expenses:
\[ 975 + 250 + 275 + 76 + 114 + 200 + 350 = 2,240 \]
Now, we can compare her total expenses to her take-home pay:
Total expenses: $2,240
Take-home pay: $2,255
Now we calculate the difference:
\[ 2,255 - 2,240 = 15 \]
Hannah has $15 left after covering all her expenses.
Now, we need to consider what "credit overload" means. Generally, credit overload can be defined as a situation where an individual has too much debt to handle relative to their income. One approach to evaluating this is by looking at the portion of her income that goes toward her credit card payments:
Total credit card payments = Credit card #1 + Credit card #2 \[ 76 + 114 = 190 \]
Now, we can calculate the percentage of her income that is going toward credit card payments:
\[ \left( \frac{190}{2,255} \right) \times 100 \approx 8.43% \]
Typically, a credit utilization over 30% of income may indicate a risk of credit overload. Since Hannah's credit card payments are only about 8.43% of her income, this suggests she is not in credit overload.
Short answer: Hannah is not in credit overload. Her total monthly expenses are $2,240, leaving her with $15 remaining after expenses. Her credit card payments amount to about 8.43% of her income, which is below the typically risky threshold of 30%.