Question

Jim just found a job with a take-home pay of $1,950 per month. He must pay $1,200 for rent and $200 for groceries each month. He also spends $200 per month on transportation. If he budgets $50 each month for clothing, $100 for restaurants and $50 for everything else, how long will it take him to put together emergency savings of $1,500?

Answer 1

Add all his expenses together:

1200 + 200 + 200 + 50 + 100 + 50 = $1,800

Subtract his expenses from his pay:

1950 - 1800 = 150

Divide how much the emergency savings is by the amount left over per month:

1500/150 = 10

it will take 10 months