You are living on your own, sharing rent with a roommate, trying to save up for college, and working

for minimum wage ($7.25) at a fast-food restaurant. You work 40 hours per week and take a bus to and

from work five days a week. Along with saving for tuition, you are also trying to save enough to have 4

months' rent in your account, a new car so you don't have to take the bus, and a vacation to Cancn

with some of your friends.

Monthly Budget

Item Cost Monthly Total

Rent $260

Utilities (cable, Internet, Cable and Internet: $30, water: $20, electricity $40

water, and electricity)

Groceries $50 per week

Entertainment $20 per week

Public transportation $1.50 per bus ride

Clothing $50

Cell phone $45

Step 1: a. Approximately how much is your gross salary per month?

b. Because you would be in the lowest tax bracket, you would be taxed at approximately

15 percent. How much would you actually take home every two-week pay period? How much

would you take home each month?

Step 2: a. How much are your total monthly expenses?

b. What other costs may you incur that are not included in your monthly budget?

c. How much disposable income do you have each month?

Step 3: How long would it take you to save 4 months' rent?

Step 4: You found an old, used car that you want to buy so you can stop taking the bus. It costs

$2,000. How long would it take you to save up for the car?

Step 5: a. Flights to Cancn are $380 round trip. The hotel where your friends are staying will cost

$75 a night and you will be staying 3 nights. What would the total cost of your trip be?

Be realistic.

b. How long would it take to save up for the vacation?

Step 6: What would you save for first?