Budgeting Quiz

Toni Joe is a chef living in Manhattan.  She earns $70,000 annually BEFORE taxes.  She estimates that she will pay 32% of her earnings in taxes and other deductions.  She hasn't missed a day of work in 4 years because she, in her words, "never gets sick."  She "saves" money by not participating in the health insurance plan at work.  She'd rather pay the 2% penalty than the monthly premium.  Because she lives close to the restaurant, Toni doesn't use a vehicle, but instead uses the Subway.  Her monthly pass costs $150.  Her apartment is a small studio apartment in the city and costs $1250 each month.  Due to the higher cost of living, her grocery bill is $200 per month.  She spends approximately $100 on clothing, $75 on her cell phone, and $200 on entertainment each month.  She is unwilling to spend less on entertainment because she believes if you work hard, you should enjoy your time off.  At home, she has an Internet package that costs $60/ mo. so she can watch Netflix.  She pays approximately $150 each month for utilities and takes good care of Cheetah, her pet cat by spending $30 each month.  She assumes that her miscellaneous expenses include household items and hygiene items that cost $55 total each month.

Use the information listed above to complete the following:

1. Create a monthly budget based on her plan (include all parts required as discussed in class).
2. Identify areas that should be modified AND show these modifications next to the original budget you created.
3. Justify in writing - Explain why you made these recommended changes AND describe how they will positively impact her financial stability in the future