Scenario Two James has worked full time as an entry-level web designer since earning his certification. He earns $47,000 a year and rents an apartment by himself. He has a credit card, which he used to purchase furniture, with a balance of $3,235. Unfortunately, to celebrate his first job, James also financed a new car-which cost $28,000. His payments are $554 for a term of five years. James has health insurance and disability insurance through his employer, which cost him $185 a month. He also contributes 4% of his gross income to his 401(k). James' fixed monthly expenses include: - Rent: $1,200 - Insurance (renter's and ID theft): $25 - Insurance (health and disability): $185 - Retirement/401(k): \$157 - Car insurance: $120 - Utilities: $100 - Cell phone: $85 - Satellite TV: $80 - Credit card (minimum payment): $150 *Note: At 17% interest, it will take 26 months to pay off this credit card debt. - Car payment: $554 *James' budget should include giving and saving. It could also include spending categories like the following: food, gas, entertainment and personal. 1. Net annual income: $37,600 2. Net monthly income: Deduct 20% of the income for payroll taxes (gross income x.80= net income) $3,133.33 Recalculate James' budget without the credit card and car loan debts. In this scenario, James paid cash for an inexpensive used car and furnished his apartment with used furniture. He has his full emergency fund of 3-6 months of expenses in a money market account. He has three main financial goals now that he's earning his first career income. First, he wants to buy a newer used car one year from now. Add a savings goal into his budget to upgrade his car. Next, James also wants to invest a full 15% of his gross income for retirement (instead of just 4% of his income). Update his budget for retirment saving to reflect his goal. Finally, James wants to begin saving for a down payment on his first house. Add a savings goal for his down payment. James" Budgeting Form \#1