James works full time as an entry-level web designer since earning his certication. He earns $47,000 a year.He rents an apartment by himself. He has a credit card, which he used to purchase furniture, with a balanceof $3,235. Unfortunately, to celebrate his rst job, James also nanced a new car. His car cost $28,000. Hispayments are $554 for a term of 5 years. James has health insurance and disability insurance through hisemployer, which cost him $185 a month. He also contributes 4% of his (gross) income to his 401(k). Jamesxed monthly expenses include:Rent .....................................................................................$950Insurance (renters and ID theft) ............................$25Insurance (health and disability) ...........................$185Retirement (401(k)) ......................................................$157Car insurance .................................................................$120Utilities .............................................................................$100Cell phone .........................................................................$85Cable TV ...........................................................................$70Credit card (minimum payment) ............................$150(Note: At 17% interest, it will take 26 months to pay o this credit card debt)Car payment ....................................................................$554James budget must also include: Giving, Saving, Food, Gas, Entertainment and PersonalScenario 3Recalculate James budget without the credit card and car loan debts. In this scenario, James paid cashfor an inexpensive used car and furnished his apartment with used furniture. He has three main nancialgoals now that he is earning his rst career income. Add into his budget a sinking fund for a newer usedcar that he plans to purchase one year from now. James also has a goal of investing a full 15% of his incomefor retirement (instead of just 4% of his income). The third thing he wants to do is begin saving for a downpayment on his rst house.Consider:How much extra money does James have to put toward his nancial goals now that he is notmaking payments on past purchases?Budgeting for LifeAfter High School(2/2)