Question

directions: use the budgeting tool to create a zero - based monthly budget. note: not all of olivias expenses will add up to equal her income—there will be some extra money to spend after all her expenses have been totaled up. that means youll get to decide what additional expenses you think olivia should plan for so that her income minus her expenses will equal zero! building olivias budget olivia is a high school senior who is planning to go to college in the fall. shes on the girls varsity softball team and during her off - season, she loves coaching local kids as a side business. she charges $15 per hour for hitting lessons, which she does every weekday for two hours (assume 20 weekdays in a month). she also works part time at the ice cream shop for 15 hours a week at $11 per hour. twenty percent of her paycheck goes toward taxes. this month is her birthday, and her grandparents always give her $100 for her birthday. she gives $150 every month to her local humane society. olivia has a $500 emergency fund and paid for her car with cash. her car is a little older, so she always saves $100 per month in a sinking fund in case she needs to make repairs. shes also saving for college. she will be going off to college in five months and estimates that she will need $3,000 for the fall semester tuition. olivia is responsible for her auto insurance and gas, which are $100 each per month. her best friends birthday is coming up, and shed like to spend $50 on a gift. olivia always makes sure to have a miscellaneous line item in her budget so she has money for last - minute expenses that she didnt plan for.

Explanation:

Step1: Calculate coaching income

She charges $15 per hour, 2 hours per weekday, and 20 weekdays in a month. So coaching income = $15\times2\times20 = 600$.

Step2: Calculate ice - cream job income before tax

She works 15 hours a week at $11 per hour. Assuming 4 weeks in a month, pre - tax income = $15\times11\times4=660$.

Step3: Calculate ice - cream job income after tax

20% of paycheck goes to taxes, so after - tax income = $660\times(1 - 0.2)=660\times0.8 = 528$.

Step4: Calculate total income

Total income = coaching income+ice - cream job income+birthday money = $600 + 528+100=1228$.

Step5: Calculate known expenses

Giving to humane society = $150$, car repair sinking fund = $100$, auto insurance = $100$, gas = $100$, gift for friend = $50$. Total known expenses = $150 + 100+100+100+50 = 500$.

Step6: Calculate remaining amount to budget for college

She needs $3000 for college in 5 months. So monthly amount for college = $\frac{3000}{5}=600$.

Step7: Calculate remaining amount for miscellaneous

Total income - known expenses - college savings amount = $1228-(500 + 600)=1228 - 1100 = 128$.

Answer:

Olivia can budget $128 for miscellaneous expenses to make her income minus expenses equal zero.