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Signature B Assignment 1

Brenda Lopez created a monthly spending budget that she projected out to increase by 3% annually to account for inflation over 40 years until retirement. She was surprised to see how little her income would increase over that time period compared to expenses. This made her reflect on ways to bring in more income. She knows her expenses will change over time as some debts are paid off and new costs like a mortgage are taken on. Brenda has started saving for retirement in a high-yield savings account but finds it difficult to save enough each month while paying bills. She needs to continue her education to avoid living paycheck to paycheck in retirement. Creating a budget has given her insight into how tight her finances are currently and motivated her

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49 views

Signature B Assignment 1

Brenda Lopez created a monthly spending budget that she projected out to increase by 3% annually to account for inflation over 40 years until retirement. She was surprised to see how little her income would increase over that time period compared to expenses. This made her reflect on ways to bring in more income. She knows her expenses will change over time as some debts are paid off and new costs like a mortgage are taken on. Brenda has started saving for retirement in a high-yield savings account but finds it difficult to save enough each month while paying bills. She needs to continue her education to avoid living paycheck to paycheck in retirement. Creating a budget has given her insight into how tight her finances are currently and motivated her

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© © All Rights Reserved
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Brenda Lopez

Fin 1380
Signature Assignment
B1-B4

B1. Monthly Spending Budget


monthly x 1.20 = X
2023 2063
Current 3%
Income
Salary $3,232.00 $3,878.40
Expenses
Tax/Benefits Withheld $746.00 $895.20
Food $200.00 $240.00
Gas $200.00 $240.00
Rent $500.00 $600.00
Entertainment $31.00 $37.20
Car Insurance $95.00 $114.00
Credit Card $250.00 $300.00
Car Payment $255.00 $306.00
Daycare $127.00 $152.40
Loan $193.00 $231.60
Phone $30.00 $36.00
Vasa $27.00 $32.40
Other $375.00 $450.00
Savings $200.00 $240.00
Total Expenses $3,229.00 $3,874.80

B1 Continued
2. It is surprising to see how little money will increase in 40 years when I am

expected to retire. If this is the suspected inflation I hope I get raises or higher paying

jobs in the future. It also worries me that in today’s economy, inflation prices are rising

while income is not rising as quickly. If both income and inflation were to increase at the

same time, I would not worry about the cost of living but that is not the case right now.

Seeing how much my bills could increase makes me reflect on how I can bring in more

income.

3. I know that many of these expenses are going to increase and/or decrease, I

am working towards mainly getting my debt down right now in my life. I would like to

have it fully paid off in a few years so I am hoping to see a zero on my loans and credit

cards. However I do know that I would like to own a home in the future so my rent would

become a mortgage and It would increase by a thousand or more. Another change I

would like to make in the future is getting an electric vehicle, and though I would still pay

more in electricity, it would still be cheaper than gas.

4. As we read through the compounding chapter, I started to look more into

retirement savings and different options for retirement accounts. I recently started a high

yield savings account because I am beginning to understand how to make your money

work for you. I have spent a lot of this year paying down debts to be able to start putting

money away. However, as I tried calculating how much I would need to save annually, it

is very difficult to be able to put that much money away each month and still have

enough for my current bills. As I look into my future calculations, I need to work more on

lowering my debt so I can put more into my savings. I also need to continue going to
school because I am living paycheck to paycheck and I do not want to be doing that in

40 years.
B3.

It is very important to give yourself more room to work with in your budget. As I

look at my calculations, although I did factor in a budget for gas and food, it only leaves

me a couple thousand a year for any emergencies. There are so many unplanned

expenses that happen every year and as inflation occurs those emergencies also

increase in price. It is vital to manage money now then try to plan for inflation in the

future. Once you retire, trying to get back into the workforce and generate the same

amount of income takes a toll on you physically. We should do what we can now to give

us the most peace of mind when we are nearing retirement because money can be a

very troublesome worry.

It is also important to be able to see your finances monthly and annually to see

where you can make changes and improvements. Or to plan goals of where you would

like your finances to be in a few years. Seeing my budget like this has given me an idea

of how tight my budget really is. It makes me reflect a lot not only on my spending habits

but on how I can generate more income.

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