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The year 2003 will find the Terrell’s beginning the year in perils. Careful planning and management will see them out of this and far ahead long before the end of the year.

At a glance you will see the budget as it is desired for the Terrell’s; however, in their first month of the year you will note that they have to make deviations. In January, they will begin by having no clothing allowance or miscellaneous allowance. Nor will they have any money to set aside for their up and coming vacation in May. They will also have to decrease their food budget even if it means cutting out the dining out experience to make things work. Unfortunately for them, they will fall under the $600.00 cash on hand balance they would like to maintain.

Their fixed budget will be $2410.00 for the entire year and this includes their house payment, utilities, transportation and life insurance. They will have to cut their food expenses by $375.00 dollars and, pay their entire automobile insurance because it is due. They will have a total of $90.00 cash to carry over into February.

In February, their income will increase due to Sherman’s student loan money. They will be able to increase their food allowance by 100.00 making it $400.00; however, this is still short of their anticipated budget of $675.00 per month for food.

They will open a savings account in February and the following funds will be placed into it:

1200.00 for their vacation in May

125.00 for auto insurance

150.00 for miscellaneous recreation

125.00 for clothing

325.00 for miscellaneous expenses

and 450.00 that is excess from their month’s income.

They will be able to carry forward $638.00 to March.

They will have 2375.00 in their savings account.

Beginning in March, their fixed budget will remain the same throughout the year because when their utility bill is less in the summer they will continue to pay 250.00 to offset the higher bills in the winter. They will also be able to elevate their food budget to $675.00 per month in March and keep it there for the rest of the year should they so desire.

In March they will begin to deposit and additional 100.00 per month into their savings account which will be the allotted amount for their annual May vacation.

100.00 for annual vacation

150.00 for auto insurance

150.00 for miscellaneous recreation

125.00 for clothing

325.00 for miscellaneous expenses. Their total deposit amount for savings will be $850.00 and they should now have $3225.00 in their savings account.

Their fixed budget will remain the same for the rest of the year; however, their savings allotment will fluctuate. In June, July, Aug and September, they will be able to deposit additional funds into their savings due to the amount of monies that they have carried from month to month and the pay fluctuations they have encountered.

Their food budget will have to be reduced in April and May to 400.00 a month to stay within their budget; however, if they needed the money they would have enough in their savings to offset the difference.

On 31 December 2003, they will have accumulated $9,425.00 minus their 1200.00 vacation expenses in May for a balance of 8225.00. This balance does not reflect any clothing that was purchased by the couple; however, if they were savvy shoppers, they could have retained the greatest portion of their money buy purchasing clothing when it is on sale. They can greet the new year with a smile because they have the 1500.00 they need for automobile insurance in January and if they were thrifty they already have enough for their next vacation. Almost forgot, while they were maintaining this annual budget, they were earning interest on their funds also.

PLEASE ACCEPT IF THIS WORKS> THANKS

	Answer June 07, 2006 12:59 a.m. (11 minutes and 17 seconds later)	ACCEPTED
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Theresa Romaker  -- MA Clinical Psychology -- 89% Positive Feedback on 29 General Accepts Instructor for undergraduate courses in the field of human sexuality