Kevin and his best buddy, Aaron, own a sporting goods store in Aspen, Colorado. They each make $$5,100$ in personal monthly income by selling ski gear, clothes, hiking accessories, and other sporting equipment. During the ski seasons $($December through April$)$ each of their income increases by $$2,000$ per month. They also each earn an extra $$2,000($$$500$ per month$)$ by teaching skiing lessons to beginner skiers. In addition, Aaron$’$s wife, Martha, is expecting their first baby this November and he is concerned with having enough cash to take care of the unexpected. Aaron expects his income to stay the same, but they may need to hire seasonal help to replace Aaron during the ski months. They think it will cost them $$2,000$ per month to hire the extra help. Kevin is concerned with balancing their business budget without Aaron around, particularly in the off season when the snow is gone. They are considering building cabins to add passive income but do not know where to start. They think they can rent them out for $$1,500$ per week $($$$6,000$ per month$)$ during ski season and $$500$ per week $($$$2,000$ per month$)$ during the off season. They have $$500,000$ in cash Aaron found at the airport and they plan to invest in building five $$100,000$ cabins. They want your help figuring things out. They currently have $$10,000$ saved in a business emergency fund for the business but do not have any personal emergency fund savings.

$1.$ Using their monthly expense table below, please determine how much Kevin and Aaron need to save in their personal emergency funds. Explain. $($Show your math, $2$ accounts: Kevin$’$s Personal, Aaron$’$s Personal.

Monthly Expenses Personal expenses for Kevin Personal expenses for Aaron

April $-$ November $$4,700$ per month $$4,200$

December$-$March $$5,300$ per month $$5,100$