Question

lauryns wages were not as much as she had budgeted. how can her budget be modified so there will be a positive actual net income?
monthly budget

	budgeted amount	actual amount
expenses - car - gas	$250	$___
expenses - insurance	$150	$___
expenses - food	$120	$___
expenses - clothes	$300	$___
expenses - college savings	$75	$___
expenses - recreation	$25
net income	$130	$___

Explanation:

Step1: Calculate total budgeted expenses

$\$250 + \$150 + \$120 + \$300 + \$75 + \$25 = \$920$

Step2: Find budgeted net income logic

Net income = Income - Total Expenses. Budgeted net income is $\$130$, so $\$1050 - \$920 = \$130$, which confirms total expenses are correct.

Step3: Set target actual net income positive

Let total actual expenses = $E$. We need $\$775 - E > 0$, so $E < \$775$.

Step4: Cut non-essential expenses

First, identify flexible expenses: Clothes, Recreation, College Savings. Current budgeted flexible expenses: $\$300 + \$25 + \$75 = \$400$. Fixed expenses (Car, Insurance, Food): $\$250 + \$150 + \$120 = \$520$.

Step5: Calculate required expense cut

Total allowed expenses: $\$775 - \$130 = \$645$ (to keep $\$130$ net income). Required cut: $\$920 - \$645 = \$275$. Cut flexible expenses: reduce Clothes to $\$100$, Recreation to $\$0$, College Savings to $\$25$. New flexible total: $\$100 + \$0 + \$25 = \$125$. New total expenses: $\$520 + \$125 = \$645$.

Step6: Verify actual net income

$\$775 - \$645 = \$130$ (positive net income)

Answer:

To achieve positive net income, modify actual expenses by reducing non-essential costs:

• Car - gas, insurance: $\$250$ (fixed)
• Food: $\$120$ (fixed)
• Clothes: $\$100$ (reduced from budgeted $\$300$)
• College Savings: $\$25$ (reduced from budgeted $\$75$)
• Recreation: $\$0$ (eliminated)

Actual net income: $\$130$

The key is cutting flexible, non-essential expenses (clothes, recreation, savings) to bring total actual expenses below $\$775$, ensuring positive net income.