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\begin{tabular}{|r|r|l|}
\hline
\multicolumn{3}{|c|}{Haley's Disposable Income:} \\
\hline
Paycheck Amount: & [tex]$\$[/tex] 485.00$ & \\
\hline
Less Expenses: & [tex]$\$[/tex] 195.00$ & \\
\hline
Net Disposable Income: & [tex]$\$[/tex] 290.00$ & \\
\hline
Prior Spending Plan: & & Recommended Changes: \\
\hline
Savings & [tex]$\$[/tex] 50$ & \\
\hline
Entertainment: & [tex]$\$[/tex] 100$ & \\
\hline
Clothing & [tex]$\$[/tex] 100$ & \\
\hline
Gifts & [tex]$\$[/tex] 40$ & - \\
\hline
Amount Remaining: & [tex]$-0-$[/tex] & \\
\hline
\end{tabular}

5. Ethan earns [tex]$\$[/tex] 800$ per month. His fixed expenses are:
- Car expenses: [tex]$\$[/tex] 115$
- Cell phone: [tex]$\$[/tex] 30$
- Insurance: [tex]$\$[/tex] 95$

Ethan also contributes [tex]$\$[/tex] 80[tex]$ per month to his church. He treats this as a fixed expense as well. Using the table on the left, calculate Ethan's fixed expenses and create a spending plan that will enable him to create a $[/tex]\[tex]$ 500$[/tex] emergency fund as soon as possible.

\begin{tabular}{|c|c|}
\hline
\multicolumn{2}{|c|}{Ethan's Monthly Spending} \\
\hline
Income: & [tex]$\$[/tex] 800$ \\
\hline
\multicolumn{2}{|c|}{Fixed Expenses:} \\
\hline
Cell phone & [tex]$\$[/tex] 30$ \\
\hline
Car insurance & [tex]$\$[/tex] 115$ \\
\hline
Insurance & [tex]$\$[/tex] 95$ \\
\hline
Church & [tex]$\$[/tex] 80$ \\
\hline
Amount Remaining: & [tex]$\$[/tex] 480$ \\
\hline
Savings & \\
\hline
Clothing & \\
\hline
Gifts & \\
\hline
Entertainment & \\
\hline
Amount Remaining & \\
\hline
\end{tabular}

6. Using the table on the right, create an ongoing spending plan for Ethan that will enable him to continue to contribute regularly to his emergency fund.

7. According to the emergency fund plan you created, how long will it take Ethan to establish a [tex]$\$[/tex] 500$ emergency fund?

Sagot :

GinnyAnswer
Let's break down and solve Ethan's financial planning step-by-step.

### Step 1: Calculate Ethan's Fixed Expenses
- Car expenses: \$115
- Cell phone: \$30
- Insurance: \$95
- Church contribution: \$80

Add these expenses together to get the total fixed expenses:
[tex]\[ \text{Fixed expenses} = \[tex]$115 + \$[/tex]30 + \[tex]$95 + \$[/tex]80 = \$320 \][/tex]

### Step 2: Calculate Ethan's Net Disposable Income
- Monthly income: \$800
- Total fixed expenses: \$320

Subtract the fixed expenses from the monthly income to calculate the disposable income:
[tex]\[ \text{Disposable income} = \[tex]$800 - \$[/tex]320 = \$480 \][/tex]

### Step 3: Ethan's Spending Plan to Save for an Emergency Fund
Ethan's goal is to create a \[tex]$500 emergency fund as quickly as possible. Given his disposable income of \$[/tex]480, he can allocate most of this towards his emergency fund.

### Spending Plan Outline:
- Savings: \$480 (all of the disposable income)
- Clothing: \$0
- Gifts: \$0
- Entertainment: \$0
- Amount Remaining: \$0

### Step 4: Calculate Time to Reach Emergency Fund Goal
Ethan needs \[tex]$500 for his emergency fund. With a monthly saving of \$[/tex]480:

[tex]\[ \text{Months required} = \frac{\[tex]$500}{\$[/tex]480} \approx 1.04167 \][/tex]

This means it will take slightly over 1 month for Ethan to save up the \$500 for his emergency fund since:
[tex]\[ \text{Partial month} = \left(1 - 0.04167\right) \times 30 \approx 1.25 \text{ days} \][/tex]

### Step 5: Create an Ongoing Spending Plan
After establishing the emergency fund, Ethan can then evaluate and create an ongoing spending plan:
- Ensure that he continues to contribute to his emergency fund or other savings.
- Allocate funds to other categories like clothing, gifts, and entertainment as necessary, staying within his disposable income limit.

### Summary
- Fixed Expenses: \$320
- Disposable Income: \$480
- Emergency Fund Goal: \$500
- Months Required to Achieve Goal: Approximately 1.04167
- Initial Spending Plan:
- Savings: \$480
- Clothing: \$0
- Gifts: \$0
- Entertainment: \$0
- Amount Remaining: \$0

Ethan should be able to establish his emergency fund in a little over one month by following this spending plan. Afterward, his ongoing plan should carefully allocate funds to other categories while still contributing to savings regularly.
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