What advice do you have for Charles and Ebony about their income, expenses, and other financial decisions?
Thinking about your own budget, describe how an economic trend (such as a change in employment, interest rates, or prices) within the last year has impacted or could impact your personal life and finances.
If the economic trend you just described persists for another year or two, how will this affect your personal life and finances?
TRANSPORTATION Increases in the cost of gas have made it more expensive for Charles to commute to work every day in the car they own. To save money on transportation expenses, Charles has joined a carpool. By carpooling three days a week, Charles has been able to save money on transportation expenses and keep their transportation budget from rising despite the increasing cost of gas. HEALTH CARE Charles, Ebony, and Marcel are in excellent health, and Charles' employer provides their health insurance. So far they've been able to keep their heal care costs low. Last Year's Actual Budget and This Year's Planned Budget Last Year's Actual This Year's Planned Spending (Budget 1) Budget (Budget 2) Difference Income Amount Percent Amount Percent Amount Total Wages After Taxes $25,000 100% $25,000 100% $0 Last Year's Actual This Year's Planned Expenditures Spending (Budget 1) Budget (Budget 2) Difference Amount Percent Amount Percent Amount Housing $8,800 34% $9,700 38% 1$900 Food $4,200 17% $4,600 18% 1$400 Health Care $1,500 6% $1,500 6% $0 Transportation $2,100 9% $2,100 9% $0 Utilities $1,500 6% $1,500 6% $0 Education $2,100 9% $2,100 9% $o Cell Phone $1,500 6% $1,500 6% $0 Personal Spending $1,000 4% $850 3% 1$150 Entertainment $800 3% $400 2% 1$400 Savings $1,500 6% $750 3% 1 $750 Total $25,000 100% $25,000 100% $25,000HOUSING Charles and Ebony rent an apartment in the neighborhood near where they grew up. This allows them to live close to their families, who help out with child care. However, the cost of living in their area has been becoming more expensive. In January, their landlord notified them that their rent would be increasing when they renewed their lease. The climate in the area is hot in the summer and cold in the winter. To keep their apartment comfortable, they use air conditioning and heat. Getty Images Your close friends Charles and Ebony know that you are learning about economics and personal nance, so they have come to you for advice about their family budget. They want to know what you think about how their budget has changed from the previous year. Charles and Ebony are life partners who share their nances. They have a 4-year- old son, Marcel. Charles has a full-time job at the local hospital. Ebony, in addition to being the primary caregiver for Marcel, is enrolled in college pa rt-time. There's a strong demand for medical ofce workers in the area. After Ebony graduates at the end of the year, she plans to get a job at the hospital as a medical ofce assistant. Charles plans to reduce his hours at work so he can go back to school to learn new skills and earn more income in the future. OTHER SPENDING Charles and Ebony each have a cell phone, and they also have a personal hotspot for Internet access. Ebony needs the Internet access because her classes are online. FOOD Food prices have been going up. Charles and Ebony have made changes by cutting back on specialty foods and fast food and buying more generic foods, but they still feel like they need to devote more money in their budget for food until they can figure out other ways to reduce their food costs
