You will need to spend money to achieve most of the long-term goals you set in your life. It could be money to pay for your education, buy a house, raise a family, travel, start a business, and so on. Because you need money to achieve your most valued long-term goals, you also need to create a savings plan as a part of your overall financial plan. Saving is not something that just happens for most people. It is the result of careful planning and controlled spending. Consider Walter, who would like to save $300 per month toward the purchase of a home. Walter's income and spending in the past month are shown below. Use this information to answer the questions that follow. Walter's Income Income Spending Net (after tax) Wages Interest Earned $2,850.00 Rent/Utilities Food $751.76 $348.32 $64.07 Clothing Transportation S499.61 Loan Payments S299.00 Entertainment $454.92 $231.42 $273.45 Stock Dividends $120.00 $239.42 Insurance Other 1. How much was Walter's income? 2. How much did Walter spend? 3. What change was there in Walter's savings? 4. Which types of spending could Walter adjust in the short run? Which types could he not adjust?
You will need to spend money to achieve most of the long-term goals you set in your life. It could be money to pay for your education, buy a house, raise a family, travel, start a business, and so on. Because you need money to achieve your most valued long-term goals, you also need to create a savings plan as a part of your overall financial plan. Saving is not something that just happens for most people. It is the result of careful planning and controlled spending. Consider Walter, who would like to save $300 per month toward the purchase of a home. Walter's income and spending in the past month are shown below. Use this information to answer the questions that follow. Walter's Income Income Spending Net (after tax) Wages Interest Earned $2,850.00 Rent/Utilities Food $751.76 $348.32 $64.07 Clothing Transportation S499.61 Loan Payments S299.00 Entertainment $454.92 $231.42 $273.45 Stock Dividends $120.00 $239.42 Insurance Other 1. How much was Walter's income? 2. How much did Walter spend? 3. What change was there in Walter's savings? 4. Which types of spending could Walter adjust in the short run? Which types could he not adjust?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Plan to Save
You will need to spend money to achieve most of the long-term goals you set in your life. It could be money to pay for your education, buy a house,
raise a family, travel, start a business, and so on. Because you need money to achieve your most valued long-term goals, you also need to create a
savings plan as a part of your overall financial plan. Saving is not something that just happens for most people. It is the result of careful planning and
controlled spending. Consider Walter, who would like to save $300 per month toward the purchase of a home. Walter's income and spending in the
past month are shown below. Use this information to answer the questions that follow.
Walter's Income
Income
Spending
Net (after tax) Wages
Interest Earned
$2,850.00 Rent/Utilities
$751.76
$64.07
Food
$348.32
Clothing
Transportation $499.61
Loan Payments $299.00
Entertainment $454.92
Stock Dividends
$120.00
$239.42
$231.42
Insurance
Other
$273.45
1. How much was Walter's income?
2. How much did Walter spend?
3. What change was there in Waiter's savings?
4. Which types of spending could Walter adjust in the short run? Which types could he not adjust?
5. What would you recommend Walter do to reach his savings goal?
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