Financial planning case $3-1$

The Financial Statements of Harry and Belinda Johnson Suggest Budgeting Problems

Harry has worked at a medium$-$size interior design firm for five years and earns a salary of $$4,080$ per month. He also receives $$3,000$ in interest income once a

year from a trust fund set up by his deceased father's estate. Belinda earns a salary of $$6,400$ per month, and she has many job$-$related benefits including flexible

benefits program, life insurance, health insurance, a $401(k)$ retirement program, workplace financial education, and a credit union. The Johnsons live in an old

apartment located approximately halfway between their places of employment. However, their rent will increase by $$100$ a month in July. Harry drives about ten

minutes to his job, and Belinda travels about $15$ minutes via public transportation to reach her downtown job. Harry and Belinda's apartment is very nice, but

small, and it is furnished primarily with furniture given to them by some of his friends. Soon after getting married, Harry and Belinda decided to begin their

financial planning. Fortunately each had taken a college course in personal finance. After initial discussion, they worked together for three evenings to develop the

financial statements presented below. Note that the cash flow statement covered the first six months of their marriage.

Balance Sheet for Harry and Belinda Johnson

January $1,2018$

ASSETS