Question

which person is living within their means?
a. cara earns $1,000 a month and spends $1,200 by putting some expenses on her credit card.
b. ella maxed out all three of her credit cards but pays the minimum balance each month.
c. bill earns a high salary but has trouble making his car payment on time due to his expensive hobbies.
d. dmitri earns $1,000 a month and spends $800 on rent, groceries, and other expenses.

Explanation:

Living within one's means means spending less than or equal to one's income.

• Option A: Cara earns $1000 but spends $1200 (by using credit card). She is over - spending.
• Option B: Ella has maxed out credit cards. This indicates she is likely over - spending her income (as credit card limits are often based on income but maxing out and only paying minimum suggests financial strain).
• Option C: Bill has trouble making car payments due to expensive hobbies. This implies his spending (on hobbies) is causing him to struggle with necessary payments, so he is not living within his means.
• Option D: Dmitri earns $1000 and spends $800. Since $800\leq1000$, he is living within his means.

Answer:

D. Dmitri earns $1,000 a month and spends $800 on rent, groceries, and other expenses.