Question
Bob also provided the following information about the household cash flow (annual basis). The listing included: Revenues Salary Investment income Outflows Home related $100,000
Bob also provided the following information about the household cash flow (annual basis). The listing included: Revenues Salary Investment income Outflows Home related $100,000 8,000 $20,000 (includes mortgage interest/principal payments, property taxes, hom eep & insurance) Food 5,000 Clothing 8,000 Health Care 6,000 Transportation 2,000 Personal 3,000 Recreation 4,000 Cars, Entertainment 9,000 Hobby 1,000 S Gifts/Charitable Giving 2,000 Insurances 6,000 26,000 Taxes b said to assume that his salary will rise 6% per year and investment income is 11% a year. His expenses should rise 3 percent per year except for medical, which will grow at a rate of 6% yearly and taxes, which will grow at 7% per year. Bob wanted to ask you as part of this process about ways to help them save. He further told you that he knew his wife, Sarah, was secretly putting away put of her household money into an account in her own name. Application Tasks and Questions: Construct a cash flow statement for this year and one for two years from now. What observations can you make about their expenditures? What ideas, methods, etc., do you have to help them save?
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