In the last chapter, the housemates discussed putting at least $20 each month toward their savings. In order to achieve this goal, they decided they need to come up with a spending and savings plan. Previously, everyone fended for themselves, with the majority of meals eaten out. They discuss that one way they can cut back on expenses is to start making more meals at home. They agree that each housemate will make three dinners a month. For the meals they cook, they will buy the groceries. The dates for these meals will be decided at the start of each month. Other monthly expenses will be divided equally among the housemates: Utilities, $250; Internet/cable, $150; and Water/garbage, $100.
Jack works four nights a week driving for Uber, where he averages $149 each night. He pays $350 per month in rent. He believes that each meal he makes for his housemates will cost him $40. He spends about $20 each week on other groceries, $75 per month on his paintball hobby, $50 per week on entertainment, and $200 each month on clothing and incidentals. He is thinking about going back to school, so he would like to start putting money toward that goal, as well as $20 each month toward long-term savings and $75 per month into a third savings account to cover monthly variable expenses and emergencies.
1. Create a cash flow statement to assess how much of Jackâ€™s money might be available for saving.
2. Create a monthly budget for Jack.
3. How much money could Jack reasonably save for college each month?