Juanita, a credit counselor, stared outside her office and saw the darkening sky, as a winter storm approached. Her next client, Bill, faced his own financial storm with debts mounting and no clear solution in sight. Juanita hunkered down to review his thick file, knowing that Bill would soon arrive looking for answers to his financial predicament.

Juanita reviewed her notes summarizing Bills current situation:

Recent college graduate earning $36,000 as a salesperson at a local technology company. Base salary of $24,000 and $12,000 earned in commissions in the past year.

- His company has been struggling recently, and he is worried about potential layoffs.

- His three largest monthly expenses:

o Rent: He rents a one-bedroom apartment in a hip part of the city for $1,200 per month. His lease is up next month, and he needs to let the landlord know if he wants to stay there. He pays his rent on-time every month. His parents, who live in the same city, have always offered him his old bedroom if he wants to move back in but would expect him to pay some rent.

o Food: He loves dining out 2-3 times per week at nice restaurants with friends and spends about $500 per month on food using his debit card.

o Entertainment: Concerts, sporting events, movies; Bill vowed that he would enjoy the city life and clearly has by spending about $500/month to entertain himself and friends.

When Bill arrived for their meeting, Juanita thought a great starting point for their discussion would be to discuss his spending habits. Juanitas experience as a credit counselor had taught her that you couldnt treat the symptom (high debt levels) without addressing the cause (spending more than you take in) first. While Bill was anxious to talk about solutions first, Juanita pulled out a worksheet they worked through together.

Answer this: 1. Complete the worksheet below to analyze Bills current budget situation

Annual Salary + Commission

Monthly Salary + Commission

Monthly Take-home Pay

Salary + Commission)

Monthly Expenses

Rent _______________________ Food. ____________________ Entertainment __________________. (assume 75F of Monthly

TOTAL Expenses. ________________________

Take-home Pay - Expenses. _____________________

2. What ideas might Juanita have on how Bill can improve his monthly budget so he can start to pay off his debts? Be sure to identify how much she thinks that Bill can save in his monthly expenses with your proposal.