Managing A Budget

"A poor man knows the true value of money and will not dare waste it"

Financial Statement

Financial Statement

Mr. Jones makes $1500 a month (minus $60 in taxes).  Mr. Jones has $5000 saved in a mutual fund which earns 4% interest ($200 a year)  Mr. Jones owns a rental house and gets $600 a month in rent.  Mr. Jones’s house is valued at $70,000 and he pays $300 a month.  Mr. Jones graduated high school and started his own business.

Income 

Salary-$1500.  Passive Income (Interest, Dividends, Real Estate).  Total Income-$2115

Expenses

Taxes-$60.  Home Mortgage-$300.  School Loan-$0.  Credit Card-$300.  Utilities-$300

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Mr. Smith makes $5000 a month (minus $200 in taxes).  Mr. Smith has $5000 in the bank which earns .1% interest ($5 a year).  Mr. Smith doesn’t own rental property.  Mr. Smith’s home is valued at $350,000 and he pays $1500 a month.  Mr. Smith has a Master Degree and runs a profitable company.  

Income

Salary-$5000.  Passive Income (Interest, Dividends, Real Estate).  Total Income-$5005

Expenses

Taxes-$200.  Home Mortgage- $1500.  School Loan-$1000.  Credit Card-$1500.  Utilities-$450

 

Mr. Jones has an income of $2115 minus expenses of $960 a month.  Cashflow =$1155 a month.  Mr. Jones sticks 20% ($231 a month into his mutual fund)

 

Mr. Smith  has an income of $5005 minus expenses of $4650 a month.  Cashflow =$355 a month.  Mr. Smith sticks 35% ($124.25 a month into his 401k)

 

Mr. Jones

Mr. Smith

   

Income

$1,500

$5,000

Interest/Dividends

$615

$5


  
   

Expenses

  

Taxes

$60

$200

Mortgage

$300

$1,500

School Loan

$0

$1,000

Credit Card

$300

$1,500

Utilities

$300

$450

 

$2,115

$5,005

 

$960

$4,650

Total Income

$1,155

$355

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