Brock and Sam started to create a budget (based on last years income and expense statement) but got stuck. They know that you have learned how to create budgets and are asking for your help. They would like you to input the correct values for the first three months of next year.

Income and Expense Statement

Name(s): Brock and Sam Wilson
For the year ending:	As of December 31, 20XX
		Dollars
Income
Wages and salaries	Name: Brock Wilson	$ 20,500
	Name: Sam Wilson	18,450
Bonuses and commissions	Brocks bonus	2,050
(1) Total Income:		$41,000
Expenses
Housing		$9,456
Utilities	Central Maine Power	1,056
	T-Mobile	528
Food	Groceries	1,896
Transportation	Auto loan	4,320
	Public transportation	4,200
Insurance		1,576
Taxes		9,738
Fun money	Cruise to Mexico	3,500
Parents loan		1,225
(2) Total Expenses:		$37,495
Surplus (Deficit):		$3,505

In addition to the statement, you will need to know the following information:

	They estimated their net annual income (after taxes and employer deductions) at $15,375 for Brock and $13,838 for Sam
	Insurance is paid at the end of each calendar quarter
	Sam purchases her commuter pass on the first of each month
	The parents loan is money they borrowed from Sams parents to pay off their student loans. How much they pay each month is determined by them
	The fun money listed on the statement is the money spent for a cruise to Mexico. They didnt keep track of any other entertainment expenses (such as dinners out and movies) incurred during the year.

Enter a value in each blank cell to get full credit for this exercise, and round all dollar amounts to the nearest whole dollar. Enter any cash deficit with a minus sign.

Three-Month Cash Budget (By Month)
Name(s): Brock and Sam Wilson
For: Three months		Ending: March 31, 20XX
	January	February	March	Total for Three Months
Income
Brocks salary	$1,281	1,281
Sams salary	1,153		1,153
Total income	2,434
Expenses
Rent	788	788
Utilities:
Central Maine Power	88		88
T-Mobile	44	44
Food	158		158
Automobile	360	360
Public transportation	350		350
Insurance	0	0
Parents loan	102		102
Fun money	292	292
Total expenses	2,182		2,576
Cash surplus (deficit)	252
Cumulative surplus (deficit)	$252

Looking at the completed budget, what single item would you recommend that they add to their budget?

Savings and investments

Dividend and interest income

Pensions and annuities

This is because:

The couple needs to budget for contingencies and save for future goals.

The couple needs to increase their taxable income.

The couple needs to increase their distributions from their retirement plan